NEI WEBWORLD INC, 424B4, 1997-05-22

NEI WEBWORLD INC
424B4, 1997-05-22
COMMERCIAL PRINTING

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Filed pursuant to Rule 424(b)(4)
SEC File No. 333-23023

[LOGO OF NEI WEBWORLD APPEARS HERE]

1,000,000 SHARES OF COMMON STOCK

1,000,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS

---------------

NEI WebWorld, Inc. (the "Company") is offering 1,000,000 shares of Common
Stock, $.01 par value per share (the "Common Stock"), and 1,000,000 Redeemable
Common Stock Purchase Warrants (the "Warrants"). The Common Stock and the
Warrants (collectively, the "Securities") are being offered separately and not
as units, and each are separately transferable. Prior to this Offering, there
has been no public market for the Common Stock and the Warrants.

Each Warrant entitles the holder to purchase one share of Common Stock at a
price of $6.88 per share during the five-year period commencing on the date of
this Prospectus. The Warrants are redeemable by the Company for $.05 per
Warrant on not less than 30 nor more than 60 days written notice if the
closing price for the Common Stock for seven trading days during a 10
consecutive trading day period ending not more than 15 days prior to the date
that the notice of redemption is mailed equals or exceeds $11.00 per share,
subject to adjustment under certain circumstances and provided there is then a
current effective registration statement under the Securities Act of 1933, as
amended (the "Act"), with respect to the issuance and sale of Common Stock
upon the exercise of the Warrants. Any redemption of the Warrants during the
one-year period commencing on the date of this Prospectus shall require the
written consent of First London Securities Corporation and RAS Securities
Corp., the representatives of the Underwriters (the "Representatives"). See
"Description of Securities."

Prior to this Offering, there has been no public market for the Common Stock
or the Warrants. The initial public offering prices of the Common Stock and
Warrants and the exercise price and other terms of the Warrants have been
determined through negotiations between the Company and the Representatives
and are not related to the Company's assets, book value, financial condition
or other recognized criteria of value. Although the Common Stock and the
Warrants have been approved for trading on the Boston Stock Exchange under the
symbols "NEI" and "NEIW," respectively, and on the Nasdaq SmallCap Market
under the symbols "NEIP" and "NEIPW", respectively, there can be no assurance
that an active trading market in the Company's securities will develop or be
sustained.

---------------
THESE ARE SPECULATIVE SECURITIES, AN INVESTMENT IN THE SECURITIES OFFERED
HEREBY INVOLVES A HIGH DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION
FROM THE PUBLIC OFFERING PRICE OF THE COMMON STOCK AND SHOULD BE
CONSIDERED ONLY BY INVESTORS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. SEE "RISK FACTORS" ON PAGES 8-13 AND "DILUTION."

---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
UNDERWRITING DISCOUNTS PROCEEDS TO
PRICE TO PUBLIC AND COMMISSIONS (1) COMPANY (2)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................. $5.50 $.55 $4.95
- --------------------------------------------------------------------------------
Per Warrant............... $.125 $.013 $.112
- --------------------------------------------------------------------------------
Total(3).................. $5,625,000 $563,000 $5,062,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
*See Footnotes on following Page

The shares of Common Stock and the Warrants are offered by the Underwriters
on a firm commitment basis, subject to prior sale, when, as and if delivered
to and accepted by the Underwriters, and subject to their right to reject
orders in whole or in part. It is expected that delivery of the certificates
for the shares of Common Stock will be made on or about May 27, 1997.

FIRST LONDON SECURITIES CORPORATION RAS SECURITIES CORP.

The date of this Prospectus is May 21, 1997
<PAGE>

- --------
(1) Does not include additional underwriting compensation to be received by
the Representatives in the form of (i) a non-accountable expense allowance
equal to 2% of the gross proceeds of this Offering, of which $50,000 has
been paid to date, and (ii) warrants issued to the Representatives (the
"Representatives' Warrants") to purchase up to 100,000 shares of Common
Stock and up to 100,000 Warrants, which Representatives' Warrants are
exercisable for a four-year period commencing one year from the effective
date of this Offering at an exercise price of 120% of the initial offering
price of the shares of Common Stock and Warrants (in each case subject to
adjustment). In addition, the Company has granted to the Representatives
certain registration rights with respect to registration of the shares of
Common Stock and the Warrants underlying the Representatives' Warrants
(the "Underlying Warrants") and the shares of Common Stock issuable upon
exercise of the Underlying Warrants. The Company has agreed to pay the
Representatives upon the exercise or redemption of the Warrants a fee
equal to 5% of the gross proceeds received by the Company from the
exercise of the Warrants and 5% of the aggregate redemption price for
Warrants redeemed. Such fee will be paid to the Representatives or their
designees no sooner than 12 months after the effective date of this
Offering. Additionally, the Representatives or their designees must be
designated in writing by the Warrant holder as having solicited the
Warrant in order to receive the fee. The Company has agreed to indemnify
the Underwriters against certain liabilities arising under the Act. See
"Underwriting."
(2) Before deducting expenses payable by the Company estimated at $479,000,
including the Representatives' non-accountable expense allowance.
(3) The Company has granted the Representative an option (the
"Representatives' Over-Allotment Option"), exercisable within 30 days from
the date of this Prospectus, to purchase on the same terms as the
Securities offered hereby up to 150,000 additional shares of Common Stock
and up to 150,000 additional Warrants solely to cover over-allotments, if
any. If the Representatives' Over-Allotment Option is exercised in full,
the total Price to Public, Underwriting Commissions, and Proceeds to
Company will be $6,468,750, $646,875 and $5,821,875, respectively. See
"Underwriting."

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (the "Registration
Statement"), pursuant to the Act with respect to the securities offered by
this Prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits thereto. THE STATEMENTS
CONTAINED IN THIS PROSPECTUS AS TO THE CONTENTS OF ANY CONTRACT OR OTHER
DOCUMENT IDENTIFIED AS EXHIBITS IN THIS PROSPECTUS ARE NOT NECESSARILY
COMPLETE, AND IN EACH INSTANCE, REFERENCE IS MADE TO A COPY OF SUCH CONTRACT
OR DOCUMENT FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT, EACH STATEMENT
BEING QUALIFIED IN ANY AND ALL RESPECTS BY SUCH REFERENCE. For further
information with respect to the Company and the securities offered hereby,
reference is made to the Registration Statement and exhibits which may be
inspected without charge at the Commission's principal office at Judiciary
Plaza, 450 Fifth Street, NW, Washington, DC 20549.

Upon consummation of this Offering, the Company will become subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and in accordance therewith will file reports, proxy
statements and other information with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at its New York Regional Office, Room 1300, 7 World Trade
Center, New York, New York 10048; and at its Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material may also be obtained from the
Public Reference Section of the Commission at prescribed rates. The Company's
Registration Statement on Form SB-2 as well as any reports to be filed under
the Exchange Act can also be obtained electronically after the Company has
filed such documents with the Commission through a variety of databases,
including among others, the Commission's Electronic Data Gathering, Analysis
And Retrieval ("EDGAR") program, Knight-Ridder Information, Inc., Federal
Filings/Dow Jones and Lexis/Nexis. Additionally, the Commission maintains a
Website (at http://www.sec.gov) that contains such information regarding the
Company. In addition, such material may also be inspected and copied at the
offices of the Boston Stock Exchange, Inc., One Boston Place, Boston,
Massachusetts.

The Company intends to furnish its shareholders with annual reports
containing audited financial statements and such other reports as the Company
deems appropriate or as may be required by law.

Such requests may be directed to Barry B. Conrad, Chairman of the Board, c/o
NEI WebWorld, Inc., 4647 Bronze Way, Dallas, Texas 75236, telephone number
(214) 330-7273.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OR THE WARRANTS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE OVER-THE-COUNTER MARKET
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

3
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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and must be read in
conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Unless
otherwise indicated, (i) all information in this Prospectus assumes no exercise
of the Warrants, the Representative's Over-Allotment Option and the
Representative's Warrants; (ii) all share and per share data have been adjusted
to give effect to a 3.33 for one stock split in March 1997; and (iii) all
information in this Prospectus has been adjusted to reflect the conversion of
the outstanding shares of the Company's preferred stock into Common Stock upon
the effective date of this Offering. All references to the "Company" or
"WebWorld" refer to NEI WebWorld, Inc.

THE COMPANY

WebWorld believes a large part of its success to date has resulted from its
ability to make three strategic acquisitions which increased its printing
capabilities, provided greater purchasing efficiencies and increased operating
efficiencies through overhead reductions as a percentage of sales while
expanding the scope of printing related services offered to its customers. In
1994, the Company acquired the business of Newspaper Enterprises, Inc., which
primarily printed The Dallas Morning News TV Magazine. In 1994 the Company also
acquired certain assets of Computer Language Research, Inc., including three
half-web presses and certain post-production equipment. In September 1996, the
Company purchased two full web presses from The Webworks Inc. ("Webworks"), a
subsidiary of Morris Newspaper Corporation, which has enabled the Company to
increase operating efficiencies by assigning presses to generally run specific
types of paper stock. The three-month period ending December 31, 1996 was the
first quarter to reflect the results of the increased customer growth including
certain customers who previously did business with Webworks. During that
quarter, revenues were $5.5 million compared to $3.8 million in the quarter
ended September 30, 1996 for an increase of 45%.

The Company plans to grow its business through the following expansion
strategy:

. Implement Integrated Commercial Web Press Facility. WebWorld believes
that developing a series of high capacity, integrated web press
facilities capable of servicing the needs of most mid-to-large size
users of commercial printed materials will provide a sustainable,
competitive advantage.

. Strategic Acquisitions. The Company plans to target acquisitions of web
printers which will diversify its customer base, business mix and
geographical coverage. Acquisition targets would generally be required
to have characteristics which would enable rapid consolidation and
integration to existing operations and produce cost savings and overhead
reductions.

. Single-Source Service Provider. WebWorld intends to expand its pre-press
and post-press capabilities to provide a one-stop service for many of
its customers. The Company intends to purchase additional equipment to
expand the Company's post-press production services such as high speed
binding and stitching, ink jetting, in-line finishing and mailing. These
value-added services often produce higher margins than printing alone
and are in demand by high-volume users.

4
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. Develop Direct Marketing. In order to develop long-term relationships
with a broad and diverse customer base, the Company is expanding its in-
house marketing staff. The objective of this program is to produce a
base of recurring printing jobs on a regularly scheduled basis and then
seek higher margin value-added opportunities to utilize additional
capacity. By expanding the in-house marketing efforts, the Company plans
to decrease its historical pattern of using print brokers to fill excess
capacity.

The Company was incorporated in 1993 as a Texas corporation and currently has
over 140 employees. The Company's offices are located at 4647 Bronze Way,
Dallas, Texas 75236, and its telephone number is (214) 330-7273.

5
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THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered.... 1,000,000 Shares
Warrants Offered........ 1,000,000 Warrants
Common Stock
Outstanding:
Before the Offering... 2,719,778 Shares
After the Offering.... 3,719,778 Shares
Warrants Outstanding:
Before the Offering... None
After the Offering.... 1,000,000
Estimated Net Proceeds.. $4.6 million(1)
Use of Proceeds......... Repay outstanding indebtedness, fund equipment
installation costs
and capital expenditures, and provide additional working
capital. See "Use of Proceeds."
Trading Symbols(2):
Boston Stock Exchange:
Common Stock........ NEI
Warrants............ NEIW
Nasdaq SmallCap
Market:
Common Stock........ NEIP
Warrants............ NEIPW
Risk Factors............ The Common Stock and the Warrants offered hereby are
speculative and involve a high degree of risk. Investors
should carefully consider the risk factors enumerated
hereafter before investing in the Common Stock and the
Warrants. See "Risk Factors" and "Dilution."
</TABLE>
- --------
(1) After subtracting the underwriting discounts and commissions and estimated
offering expenses payable by the Company, including a 2% non-accountable
expense allowance to the Representatives.
(2) The Boston Stock Exchange and the Nasdaq SmallCap Market symbols do not
imply that an established public trading market will develop for any of
these securities, or if developed, that any such market will be sustained.
See "Risk Factors--Possible Applicability of Rules Relating to Low-Priced
Stock; Possible Failure to continue to Qualify for Listing on the Boston
Stock Exchange or Nasdaq SmallCap Market Listing."

6
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SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED MARCH NINE MONTHS ENDED
31, DECEMBER 31,
------------------ --------------------
1995 1996 1995 1996
------- --------- --------- ---------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales........................... $12,006 $ 14,286 $ 11,039 $ 12,820
Cost of sales....................... 9,776 12,240 9,416 10,611
------- --------- --------- ---------
Gross profit........................ 2,230 2,046 1,623 2,209
Operating expenses.................. 1,663 1,966 1,557 1,859
------- --------- --------- ---------
Operating income.................... 567 80 66 350
Other income (expense).............. (417) (419) (311) (84)
------- --------- --------- ---------
Income (loss) before income tax
expense and extraordinary item..... 150 (339) (245) 266
Income tax (benefit) expense........ 48 (29) (22) 90
------- --------- --------- ---------
Income (loss) before extraordinary
item............................... 102 (310) (223) 176
Extraordinary item.................. -- -- -- (72)
------- --------- --------- ---------
Net income (loss)................... $ 102 $ (310) $ (223) $ 104
======= ========= ========= =========
Pro forma earnings per share(1):
Income (loss) before extraordinary
item.............................. -- (0.11) (0.08) 0.06
Net income (loss).................. -- (0.11) (0.08) 0.04
Pro forma common shares
outstanding....................... -- 2,719,778 2,719,778 2,719,778
OTHER DATA:
EBITDA(2)........................... $ 1,177 $ 723 $ 546 $ 903
Net cash provided by (used for)
operating activities............... (73) 31 (150) 431
Net cash used for investing
activities......................... (151) (245) (198) (158)
Net cash provided by (used for)
financing activities............... (154) 213 390 (273)
Depreciation and amortization....... 611 643 480 553
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------
ACTUAL AS ADJUSTED(3)
------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital......................................... $(1,010) $ 2,321
Total assets............................................ 8,805 9,887
Long-term debt, less current portion.................... 3,396 2,143
Shareholders' equity.................................... 745 5,329
</TABLE>
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(1) Pro forma to give effect to a 3.33 for one stock split in March 1997 and
the conversion of the outstanding shares of the Company's preferred stock
upon the effectiveness of this Offering.
(2) EBITDA represents operating income excluding interest, taxes, depreciation,
amortization of goodwill and other intangible assets (as presented on the
face of the income statement). EBITDA is not a substitute for net cash
provided by operating activities or operating income in accordance with
generally accepted accounting principles. EBITDA is presented because
management believes that it is a widely accepted financial indicator of a
company's ability to service and/or incur indebtedness, maintain current
operating levels of fixed assets and acquire additional operations and
businesses. Accordingly, significant uses of EBITDA include, but are not
limited to, interest and principal payments on long-term debt, including
indebtedness under the Company's revolving credit agreement. Items excluded
from EBITDA, such as interest, taxes, depreciation and amortization, are
significant components of the Company's operations and should be considered
in evaluating the Company's financial performance.
(3) The as adjusted summary balance sheet data has been prepared as if the
Offering had occurred as of December 31, 1996 and reflects the issuance of
the Securities offered by the Company hereby and the application by the
Company of the net proceeds therefrom. See "Use of Proceeds."

7
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RISK FACTORS

Prospective investors should carefully review the following risk factors
together with the other information in this Prospectus in evaluating the
Company and its business prior to purchasing the Common Stock and the Warrants
offered by this Prospectus. This Prospectus contains forward-looking
statements that involve risks and uncertainties. Actual results could differ
from those discussed in the forward-looking statements as a result of factors,
including those set forth below and elsewhere in the Prospectus.

NATURE OF COMMERCIAL PRINTING BUSINESS

The Company's quarterly operating results have fluctuated as a result of a
number of factors, including overall trends in the economy, acquisitions of
new businesses and customer buying patterns. In addition, a fire at the
Company's facility in March 1996 had a significant adverse impact on the
Company's operations during the last quarter of fiscal 1996 and the first two
quarters of fiscal 1997.

High production commercial printing facilities require significant capital
expenditures. Although the Company has to date been able to acquire printing
presses at prices less than their replacement costs, there is no assurance
that it will continue to be able to do so. New presses offering comparable
characteristics to those operated by the Company generally range in price from
$6 to $12 million.

The Company competes in the general commercial printing sector, which is
characterized by individual orders from customers for specific printing
projects rather than long-term contracts, with continued engagement for
successive jobs dependent upon the customer's satisfaction with the services
provided. As such, WebWorld is unable to predict the number, size and
profitability of printing jobs in a given period. Consequently the timing of
projects in any quarter could have a significant impact on financial results
in that quarter. In addition, WebWorld has experienced some seasonality in its
sales with the calendar fourth quarter being the highest sales period and with
January and July being the lowest sales months. Quarterly results in the
future may be influenced by these or other factors and, accordingly, there may
be significant variations in the Company's quarterly operating results. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

RELIANCE ON KEY CUSTOMERS

WebWorld has an existing contract with The Dallas Morning News to print its
TV Magazine. The contract was originally entered into by the Company's
predecessor in 1978 and has been renewed for successive terms ranging from one
to three years in duration. The current contract expires in January 1998. The
Dallas Morning News represented approximately 55% of the Company's business in
fiscal 1996; however, because of increased sales volume, The Dallas Morning
News accounted for approximately 36% of the Company's sales in the first nine
months of fiscal 1997. Although the Company believes that its relations with
its customers are good, the termination of The Dallas Morning News TV Magazine
contract or loss of any other significant customer could have a material
adverse effect on the results of operations, financial condition and cash
flows of the Company. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources" and
"Business--Customers."

COMPETITION

The commercial printing industry is extremely competitive and fragmented.
The Company competes with numerous large and small printing companies, some of
which have greater financial resources. The Company competes on the basis of
ongoing customer service, quality of finished products and price. No assurance
can be given that the Company will be able to compete effectively in the
future. See "Business--Competition."

ASSET RELOCATION

The Company's assets acquired from Webworks are located in a leased
facility, and the related lease expires in September 1997. The Company has
entered into a five-year lease for a facility adjacent (but not attached) to

8
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the Company's existing operations. Additionally, the Company has entered into
a contract to purchase the facility by December 31, 1997. The Company is
relocating the former Webworks assets to its facilities prior to September
1997 and shifting certain of its administrative offices and pre-press and
post-press services to the new leased facility. In connection with relocating
the assets acquired from Webworks, the two printing presses acquired from
Webworks will be dismantled in the former Webworks facility and reassembled in
the Company's facilities. The Company estimates that each press will be out of
operation for two to six months in connection with the relocation, and the
Company plans to stagger the relocation of the presses so that one of the
presses will be operating at all times. Although the Company does not
anticipate the relocation of these presses to adversely impact its ability to
service existing business, the reduction in the Company's operating capacity
during the relocation may adversely impact the Company's ability to attract or
service new business. In addition, there can be no assurance that the
relocation will be timely completed, that the costs will not be in excess of
the Company's estimates or that the operation of printing presses to be
relocated will not be materially impaired as a result of the relocation. If
unexpected problems occur with the printing presses or the relocation in
general, the Company's operations and financial performance could be
materially and adversely impacted.

INTEGRATION OF UNSPECIFIED ACQUISITIONS

A material element of WebWorld's growth strategy is to expand its existing
business in the Dallas-Fort Worth metropolitan area and, in the future, in
other geographic markets. This expansion may be made through internal growth
or through strategic acquisitions. While the Company continuously evaluates
opportunities to make strategic acquisitions, it has no present commitments or
agreements with respect to any material acquisitions. There can be no
assurance that the Company will be able to identify and acquire such companies
or that it will be able to successfully integrate the operations of any
companies it acquires. Further, any acquisition may initially have an adverse
effect upon the Company's operating results while the acquired businesses are
adopting the Company's management and operating practices. In addition, there
can be no assurance that the Company will be able to establish, maintain or
increase profitability of an entity once it has been acquired. Also, if
WebWorld does not have sufficient cash resources for any acquisition, its
growth could be limited. There can be no assurance that WebWorld will be able
to obtain adequate financing for any acquisition, or that, if available, such
financing will be on terms acceptable to WebWorld. A maximum of $912,000 or
19.9% of the net proceeds from this Offering may be used for general working
capital purposes and capital expenditures, including possible acquisitions of
additional printing operations. See "Use of Proceeds." The consent of the
Company's primary lender will be required to be obtained in order to
consummate such acquisitions. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources" and "Business--Business Strategy."

DEPENDENCE ON KEY PERSONNEL

The Company's success is largely dependent on the skills, experience and
performance of certain key members of its management, including particularly
Richard J. Wiencek, the Company's Chief Executive Officer. The loss of the
services of any of these key employees could have a material adverse effect on
the Company's business, financial condition, results of operations and cash
flows. WebWorld has not obtained key man life insurance on the lives of these
individuals. The Company has entered into a three year employment contract
with Mr. Wiencek, and the Company has not entered into employment agreements
with any of its other employees. The Company's future success and plans for
growth also depend on its ability to attract, train and retain skilled
personnel in all areas of its business. See "Management."

GEOGRAPHIC CONCENTRATION AND ECONOMIC CONDITIONS

The Company's operations are located in the Dallas-Fort Worth metroplex, and
the majority of its customers are located in the Southwestern United States.
The Company and its profitability may be susceptible to the effects of
unfavorable or adverse local economic factors and conditions affecting these
geographic regions.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

WebWorld is subject to the environmental laws and regulations of the United
States and Texas concerning emissions into the air, discharges into waterways
and the generation, handling and disposal of waste materials.

9
<PAGE>

The Company's commercial property insurance covers pollutant clean-up and
accidental discharge up to $15,000 per occurrence, subject to certain
limitations and conditions. While the Company believes it is currently in
substantial compliance with these laws and regulations, there can be no
assurance that future changes in such laws and regulations will not have a
material effect on the Company's operations. See "Business--Government
Regulation and Environmental Matters."

TECHNOLOGICAL CHANGES

Production technology in the printing industry has evolved and continues to
evolve. The Company does not consider itself a technology leader and does not
attempt to be a leader in this area. WebWorld invests in technology
improvements after such improvements have been proven to be cost-effective.
The Company is currently evaluating digital imaging technology, along with new
finishing technology for inclusion in its service facility. WebWorld will
continue to add technology as the needs occur.

The printing industry has experienced significant changes due to
technological changes. Because of advances in computer and related
communication technologies, certain products that were once printed by
commercial printers are now generated on computers through word processing or
desktop publishing software. In addition, some information is now disseminated
in a digital or electronic format rather than disseminated in a paper format
and this trend could continue in the future.

VOLATILITY OF PAPER PRICES

A material component of the Company's operating costs is the price of paper,
a commodity that has experienced significant price volatility in recent years.
WebWorld anticipates that fluctuations in the price of paper will continue in
the future. Although increased paper prices potentially affect operating
margins, such increases are typically an expense of the Company's customers.
Nevertheless, increased paper prices could decrease orders for printing
services or the size of such orders.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering, the Company will have outstanding
3,719,778 shares of Common Stock (3,869,778 shares if the Underwriter's over-
allotment option is exercised in full). In addition, substantially all of the
2,719,778 shares previously issued by the Company would be eligible for resale
90 days after the Offering subject to the provisions of Rule 144 under the
Act; however, shareholders owning 2,633,197 shares and the Company have agreed
not to offer, sell, contract to sell or otherwise dispose of any shares of
Common Stock or any securities exercisable for or convertible into Common
Stock for a period of one year after the date of this Prospectus without the
prior written consent of the Representative.

No predictions can be made as to the effect, if any, that market sales of
such shares will have on the market price of shares of Common Stock prevailing
from time to time. However, sales of substantial amounts of Common Stock in
the open market or the availability of such shares for sale following this
Offering could adversely affect the market price for the Common Stock. See
"Shares Eligible for Future Sale," "Description of Capital Stock" and
"Principal Shareholders."

ARBITRARY OFFERING PRICE AND EXERCISE PRICE OF WARRANTS

The public offering price of the Common Stock and the Warrants and the
exercise price of the Warrants, as well as the exercise price of the
Representatives' Warrants, have been determined solely by negotiations between
the Company and the Representatives. Among the factors considered in
determining these prices were the Company's current financial condition and
prospects, market prices of similar securities of comparable publicly traded
companies, and the general condition of the securities market. However, the
public offering price of the Common Stock and the Warrants and the exercise
price of the Warrants and the Representatives' Warrants do not necessarily
bear any relationship to the Company's assets, book value, earnings or any
other established criterion of value. See"Underwriting."

NECESSITY TO MAINTAIN CURRENT PROSPECTUS AND REGISTRATION STATEMENT

The Company must maintain an effective registration statement on file with
the Commission before any Warrant may be redeemed or exercised. It is possible
that the Company may be unable to cause a registration

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<PAGE>

statement covering the Common Stock underlying the Warrants to be effective.
It is also possible that the Warrants could be acquired by persons residing in
states where the Company is unable to qualify the Common Stock underlying the
Warrants for sale. In either event, the Warrants may expire, unexercised,
which would result in the holders losing all the value of the Warrants.

STATE BLUE SKY REGISTRATION REQUIRED TO EXERCISE WARRANTS

Holders of the Warrants have the right to exercise the Warrants only if the
underlying shares of Common Stock are qualified, registered or exempt from
registration under applicable securities laws of the states in which the
various holders of the Warrants reside. The Company cannot issue shares of
Common Stock to holders of the Warrants in states where such shares are not
qualified, registered or exempt. See "Description of Securities--Warrants."

REDEEMABLE WARRANTS AND IMPACT ON INVESTORS

The Warrants are subject to redemption by the Company in certain
circumstances. The Company's exercise of this right would force a holder of
the Warrants to exercise the Warrants and pay the exercise price at a time
when it may be disadvantageous for the holder to do so, to sell the Warrants
at the then current market price when the holder might otherwise wish to hold
the Warrants for possible additional appreciation, or to accept the redemption
price, which is likely to be substantially less than the market value of the
Warrants in the event of a call for redemption. Holders who do not exercise
their Warrants prior to redemption by the Company will forfeit their right to
purchase the shares of Common Stock underlying the Warrants. The foregoing
notwithstanding, the Company may not redeem the Warrants at any time that a
current registration statement under the Act is not then in effect. See
"Description of Securities--Warrants."

REPRESENTATIVES' POTENTIAL INFLUENCE ON THE MARKET

It is anticipated that a significant amount of the Common Stock and the
Warrants will be sold to customers of the Representatives. Although the
Representatives have advised the Company that they intend to make a market in
the Common Stock and the Warrants, they will have no legal obligation to do
so. The prices and the liquidity of the Common Stock and the Warrants may be
significantly affected by the degree, if any, of the Representatives'
participation in the market. No assurance can be given that any market making
activities of the Representatives, if commenced, will be continued. See
"Underwriting."

POSSIBLE APPLICABILITY OF RULES RELATING TO LOW-PRICED OR "PENNY" STOCKS;
POSSIBLE FAILURE TO CONTINUE TO QUALIFY FOR LISTING ON THE BOSTON STOCK
EXCHANGE OR NASDAQ SMALLCAP MARKET LISTING

The Commission has adopted regulations which generally define a "penny
stock" to be any equity security that has a market price (as defined) of less
than $5.00 per share, subject to certain exceptions. While the price at which
the shares of Common Stock offered to the public pursuant to this Offering
will be in excess of $5.00, the Warrants offered hereby will initially be
"penny stocks" and become subject to rules that impose additional sales
practice requirements on broker/dealers who sell such securities to persons
other than established customers and accredited investors, unless the Common
Stock and the Warrants are listed on the Boston Stock Exchange. There can be
no assurance that the Company will be able to satisfy the listing criteria of
the Boston Stock Exchange or that the Common Stock or the Warrants will trade
for $5.00 or more per security after the Offering. Consequently, the "penny
stock" rules may restrict the ability of broker/dealers to sell the Company's
securities and may affect the ability of purchasers in this Offering to sell
the Company's securities in a secondary market.

Although the Common Stock and the Warrants have been approved for trading on
the Boston Stock Exchange and the Nasdaq SmallCap Market, there can be no
assurance that a trading market for the Common Stock and the Warrants will
develop or, if developed, will be sustained. Furthermore, there can be no
assurance that the securities purchased by the public hereunder may be resold
at their original offering price or at any other price.

11
<PAGE>

For continued listing on the Boston Stock Exchange, a company must maintain
a $500,000 market value of the public float, $500,000 in stockholder's equity
and $1.0 million in total assets. The failure to meet these maintenance
criteria in the future may result in the discontinuance of the listing of the
Common Stock and Warrants on the Boston Stock Exchange.

For continued listing on the Nasdaq SmallCap Market, a company must maintain
a $200,000 market value of the public float, $2.0 million in total assets and
$1.0 million in total capital and surplus. In addition, continued inclusion
requires two market-makers and a minimum bid of $1.00 per share. The failure
to meet these maintenance criteria in the future may result in the
discontinuance of the listing of the Common Stock and Warrants on the Nasdaq
SmallCap Market.

If the Company is or becomes unable to meet the continued listing criteria
of the Boston Stock Exchange or the Nasdaq SmallCap Market and becomes
delisted therefrom, trading, if any, in the Common Stock and the Warrants
would thereafter be conducted in the over-the-counter market in the so-called
"pink sheets" or, if then available, "Electronic Bulletin Board" administered
by the National Association of Securities Dealers, Inc. (the "NASD"). In such
an event, the market price of the Common Stock and the Warrants may be
adversely impacted. As a result, an investor may find it difficult to dispose
of or to obtain accurate quotations as to the market value of the Common Stock
and the Warrants.

EXERCISE OF REPRESENTATIVES' PURCHASE WARRANTS

In connection with this Offering, the Company will sell to the
Representatives or their designees, for nominal consideration, the
Representatives' Warrants to purchase up to 100,000 shares of Common Stock and
up to 100,000 Underlying Warrants from the Company. The Representatives'
Warrants will be exercisable for a four-year period commencing one year from
the effective date of this Offering at an exercise price of $120% of the price
at which the Common Stock and Warrants are sold to the public, subject to
adjustment. The Representatives' Warrants may have certain dilutive effects
because the holders thereof will be given the opportunity to profit from a
rise in the market price of the underlying shares with a resulting dilution in
the interest of the Company's other shareholders. The terms on which the
Company could obtain additional capital during the life of the
Representatives' Warrants may be adversely affected because the holders of the
Representatives' Warrants might be expected to exercise them at a time when
the Company would otherwise be able to obtain comparable additional capital in
a new offering of securities at a price per share greater than the exercise
price of the Representatives' Warrants.

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF SECURITIES PRICES

Prior to this Offering, there has been no public market for the Common Stock
or the Warrants. Although the Common Stock and the Warrants have been approved
for trading on the Boston Stock Exchange and the Nasdaq SmallCap Market, there
can be no assurance that a regular trading market will develop (or be
sustained, if developed) for the Common Stock or the Warrants upon completion
of this Offering, or that purchasers will be able to resell their Common Stock
or Warrants or otherwise liquidate their investment without considerable
delay, if at all. Recent history relating to the market prices of newly public
companies indicates that, from time to time, there may be significant
volatility in their market price. There can be no assurance that the market
price of the Common Stock or the Warrants will not be volatile as a result of
a number of factors, including the Company's financial results or various
matters affecting the stock market generally.

12
<PAGE>

FORWARD-LOOKING STATEMENTS

This Prospectus includes "forward looking statements" within the meaning of
Section 27A of the Act, and Section 21E of the Exchange Act. The actual
results of the Company may differ significantly from the results discussed in
such forward-looking statements. Certain factors that might cause such
differences include, but are not limited to, the factors discussed in this
"Risk Factors" section. The safe harbors contained in Section 27A of the Act
and Section 21E of the Act, which apply to certain forward-looking statements,
are not applicable to this Offering.

NO DIVIDENDS

The Company has not declared or paid any cash dividends on its Common Stock
since its inception. The Company currently intends to retain all earnings for
the operation and expansion of its business and does not anticipate paying any
dividends in the foreseeable future. In addition, the Company's credit
agreement prohibits the payment of dividends. See "Dividend Policy" and Note 7
of "Notes to Financial Statements."

CONTROL BY PRINCIPAL SHAREHOLDERS AND CERTAIN TRANSACTIONS

Upon completion of this Offering, the directors and executive officers of
the Company will own approximately 71% of the outstanding Common Stock of the
Company. As a result, these shareholders will be able to control the
management and policies of the Company through the ability to determine the
outcome of elections for the Company's Board of Directors and other matters
requiring the vote or consent of shareholders of the Company. See "Principal
Shareholders."

The Company is a party to a management agreement with Conrad/Collins
Merchant Banking Group Ltd. ("MBG"), of which Barry B. Conrad, the Chairman of
the Board of the Company, and Floyd W. Collins, a director of the Company, are
principals. Under the terms of the agreement, MBG provides supervisory
management services to the Company, including the negotiation, financing and
consummation of acquisitions made by the Company. MBG has earned as fees
$100,000, $100,000, and $125,000 during fiscal years 1995 and 1996 and for the
nine months ended December 31, 1996, respectively. In addition, the Company
previously was a party to a consulting agreement with Robert D. Kopitke who is
also a director of the Company. This agreement was terminated in April 1997.
The Company also has an employment agreement with Richard J. Wiencek, the
Company's President and Chief Executive Officer and a director, which provides
for an annual base salary of $168,000, subject to possible adjustment.
Although the Company believes that the terms of these agreements are no less
favorable to the Company than those available from unaffiliated third parties,
the terms of these agreements were not subject to arm's length negotiations
and necessarily involve conflicts of interest. See "Management--Board of
Directors."

PREFERRED STOCK AUTHORIZED

The Company's Articles of Incorporation authorizes the issuance of 2,000,000
shares of preferred stock, the rights, preferences and privileges of which are
to be determined by the Company's Board of Directors. Although the Company has
no intention at the present to issue any preferred stock, the Company may in
the future issue and sell preferred stock, which will likely have dividend,
distribution and liquidation preferences senior to common shareholders and
voting rights which may dilute the common shareholder voting rights. See
"Description of Capital Stock--Preferred Stock."

DILUTION

Purchasers of shares of Common Stock will suffer an immediate, substantial
dilution of approximately $4.21 or 77% in the net tangible book value of their
shares of Common Stock since the purchase price of the shares of Common Stock
substantially exceeds the current tangible book value per share of Common
Stock. See "Dilution."

13
<PAGE>

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of 1,000,000
shares of Common Stock and 1,000,000 Warrants offered hereby are estimated to
be approximately $4.6 million ($5.3 million if the Representatives' Over-
Allotment Option is exercised in full) after deducting the underwriting
discounts and estimated offering expenses and a non-accountable expense
allowance payable to the Representative equal to 2% of such gross proceeds.

The following reflects the application of the estimated net proceeds by the
Company:

<TABLE>
<CAPTION>
PERCENT OF
USE DOLLAR AMOUNT NET PROCEEDS
--- ------------- ------------
<S> <C> <C>
Reduce outstanding balance on revolving credit
line with Congress Financial Corporation
(Southwest)..................................... $1,462,000 31.8%
Repay mortgage term note to Congress Financial
Corporation (Southwest)......................... 750,000 16.4
Repay term note to The Webworks, Inc............. 510,000 11.1
Repay term note to Robert L. Jensen.............. 200,000 4.4
Equipment installation and restoration costs..... 750,000 16.4
Working capital and capital expenditures......... 912,000 19.9
---------- -----
$4,584,000 100.0%
</TABLE>

At December 31, 1996, the Company's outstanding balance under the revolving
credit note issued to Congress Financial Corporation (Southwest) ("Congress")
was $1.46 million. The advances under this note have been used by the Company
to provide working capital. The outstanding indebtedness under this note bears
interest at a rate equal to Core States Bank prime rate plus 1.25% and is
repayable on December 31, 1998. The Company's outstanding indebtedness under
the Congress mortgage term loan bears interest at prime rate plus 1.5% per
annum and matures on December 31, 1998.

On December 31, 1996, the Company had outstanding indebtedness to The
Webworks, Inc. of $510,000. This indebtedness bears interest at 12% per annum
and is repayable in installments of $100,000 on September 12, 1997 and
September 12, 1998 and $310,000 on September 12, 1999.

The Company's note to Robert L. Jensen (seller of Newspaper Enterprises,
Inc.) bears interest at a rate of 8% per annum and matures on February 28,
1999. This note is not secured and is subordinated to all of the Company's
indebtedness to senior lenders.

The Company will utilize an estimated $580,000 of the net proceeds for the
relocation and installation of the assets acquired from Webworks to the
Company's facilities and an additional $170,000 for related capital
improvements. See "Business--Facilities and Capabilities."

The balance of the net proceeds will be used for general working capital
purposes and capital expenditures, including possible acquisitions of
additional printing operations. The Company does not have any present
agreements or understandings regarding any such acquisitions. The Company
plans to make capital purchases of approximately $2.0 million after completion
of the relocation of certain of its assets to its facilities to increase its
pre-press and post-press capabilities, including $300,000 to increase the
capacity and performance of an existing press. A portion of the net proceeds
will be used for such purposes.

Pending the use of proceeds for the foregoing purposes, the net proceeds
will be invested in short-term, interest bearing obligations.

The Company expects that the net proceeds of the Offering, together with
internally generated funds and funds available under its revolving credit
facility, will be sufficient to meet its cash requirements through fiscal year
1998.

14
<PAGE>

DIVIDEND POLICY

The Company has not declared or paid any cash dividends on its Common Stock
since its inception. The Company currently intends to retain all earnings for
the operation and expansion of its business and does not anticipate paying any
dividends in the foreseeable future. In addition, the Company's credit
agreement with Congress prohibits the payment of dividends. See Note 7 to
"Notes to Consolidated Financial Statements."

CAPITALIZATION

The following table sets forth the capitalization of the Company (i) as of
December 31, 1996, and (ii) as adjusted to reflect the sale by the Company of
1,000,000 shares of Common Stock and 1,000,000 Warrants offered hereby at the
initial public offering price of $5.50 per share of Common Stock and $.125 per
Warrant (after deduction of the underwriting discount and estimated offering
expenses) and the application of the net proceeds therefrom as described under
"Use of Proceeds."

<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------
ACTUAL AS ADJUSTED(1)
------ --------------
<S> <C> <C>
Current portion of long-term debt....................... $ 664 $ 457
====== ======
Long-term debt, less current portion.................... $3,396 $2,143
Shareholders' equity:
Preferred stock: 2,000,000 shares of $1 par value
authorized, no shares issued and outstanding......... -0- -0-
Common stock: 20,000,000 shares of $.01 par value
authorized, 2,719,778 shares issued and outstanding
(actual) and 3,719,778 shares issued and outstanding
(as adjusted)........................................ 27 37
Common stock purchase warrants........................ -0- 125
Additional paid-in capital............................ 1,034 5,483
Accumulated deficit................................... (191) (191)
Notes receivable--shareholders........................ (125) (125)
------ ------
Total shareholders' equity.............................. 745 5,329
------ ------
Total capitalization.................................. $4,141 $7,472
====== ======
</TABLE>
- --------
(1) Excludes the issuance of (i) 1,000,000 shares of Common Stock upon
exercise of the Warrants; (ii) up to 300,000 shares of Common Stock
issuable pursuant to the Representative's Over-Allotment Option and that
underlie the Warrants contained therein; (iii) up to 200,000 shares
issuable pursuant to the Representatives' Warrants and the Underlying
Warrants contained therein; and (iv) 350,000 shares of Common Stock
reserved for issuance under the Company's Stock Option Plan, of which no
shares of Common Stock are currently subject to outstanding options. See
"Underwriting," "Management--Stock Option Plan," and "Description of
Securities."

15
<PAGE>

DILUTION

The net tangible book value of the Common Stock at December 31, 1996 was
$205,000 or $.08 per share. "Net tangible book value per share" represents the
amount of total tangible assets less total liabilities, divided by the number
of total shares of Common Stock outstanding. After giving effect to the sale
of the 1,000,000 shares of Common Stock at the initial public offering price
of $5.50 per share and $.125 per Warrant, and the initial application of the
estimated net proceeds therefrom, pro forma net tangible book value of the
Company at December 31, 1996, would have been $4,788,000 or $1.29 per share,
representing an immediate increase in net tangible book value of $1.21 per
share to existing shareholders and an immediate dilution of $4.21 per share
(or approximately 77% dilution) to purchasers of shares of Common Stock in
this Offering as illustrated in the following table:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................ $5.50
Net tangible book value per share before this Offering....... $ .08
Increase in value per share attributable to new investors.... 1.21
-----
Pro forma net tangible book value per share after this
Offering...................................................... 1.29
-----
Dilution per share to new investors............................ $4.21
=====
Percent of dilution to new investors........................... 77%
</TABLE>

The following table sets forth as of December 31, 1996, (i) the number of
shares of Common Stock purchased from the Company by the existing
shareholders, the total consideration paid and the average price per share
paid for such shares by the existing shareholders and (ii) the number of
shares of Common Stock to be sold by the Company in this Offering, the total
consideration to be paid and the average price per share.

<TABLE>
<CAPTION>
SHARES TOTAL
PURCHASED(1) CONSIDERATION
----------------- ------------------ AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ---------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing shareholders........ 2,719,778 73.1% $1,148,500 17.3% $ .42
New investors................ 1,000,000 26.9% 5,500,000 82.7% $5.50
--------- ----- ---------- -----
Total...................... 3,719,778 100.0% $6,648,500 100.0%
========= ===== ========== =====
</TABLE>
- --------
(1) Excludes the issuance of (i) 1,000,000 shares of Common Stock upon
exercise of the Warrants; (ii) up to 300,000 shares of Common Stock
issuable pursuant to the Representatives' Over-Allotment Option and that
underlie the Warrants contained therein; (iii) up to 200,000 shares
issuable pursuant to the Representatives' Warrants and the Underlying
Warrants contained therein; and (iv) 350,000 shares of Common Stock
reserved for issuance under the Company's Stock Option Plan, of which no
shares of Common Stock are currently subject to outstanding options. See
"Underwriting," "Management--Stock Option Plan," and "Description of
Securities."

16
<PAGE>

SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with the
financial statements and the notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this Prospectus. The data for the years ended March 31, 1995 and 1996, and
for the nine months ended December 31, 1996, are derived from the audited
financial statements included elsewhere in this Prospectus. The data for the
nine months ended December 31, 1995 are derived from unaudited financial
statements that are included elsewhere in this Prospectus and that include, in
the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the information
set forth therein. The results of operations for the nine months ended
December 31, 1996 are not necessarily indicative of future results.

<TABLE>
<CAPTION>
YEAR ENDED MARCH NINE MONTHS ENDED
31, DECEMBER 31,
------------------ --------------------
1995 1996 1995 1996
------- --------- --------- ---------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales........................... $12,006 $ 14,286 $ 11,039 $ 12,820
Cost of sales....................... 9,776 12,240 9,416 10,611
------- --------- --------- ---------
Gross profit........................ 2,230 2,046 1,623 2,209
Operating expenses.................. 1,663 1,966 1,557 1,859
------- --------- --------- ---------
Operating income.................... 567 80 66 350
Other income (expense).............. (417) (419) (311) ( 84)
------- --------- --------- ---------
Income (loss) before income tax
expense and extraordinary item..... 150 (339) (245) 266
Income tax (benefit) expense........ 48 (29) (22) 90
------- --------- --------- ---------
Income (loss) before extraordinary
item............................... 102 (310) (223) 176
Extraordinary item.................. -- -- -- (72)
------- --------- --------- ---------
Net income (loss)................... $ 102 $ (310) $ (223) $ 104
======= ========= ========= =========
Pro forma earnings per share(1):
Income (loss) before extraordinary
item.............................. -- (0.11) (0.08) 0.06
Net income (loss).................. -- (0.11) (0.08) 0.04
Pro forma common shares
outstanding....................... -- 2,719,778 2,719,778 2,719,778
OTHER DATA:
EBITDA(2)........................... $ 1,177 $ 723 $ 546 $ 903
Net cash provided by (used for)
operating activities............... (73) 31 (150) 431
Net cash used for investing
activities......................... (151) (245) (198) (158)
Net cash provided by (used for)
financing activities............... (154) 213 390 (273)
Depreciation and amortization....... 611 643 480 553
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------
ACTUAL AS ADJUSTED(3)
------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital......................................... $(1,010) $ 2,321
Total assets............................................ 8,805 9,887
Long-term debt, less current portion.................... 3,396 2,143
Shareholders' equity.................................... 745 5,329
</TABLE>
- --------
(1) Pro forma to give effect to a 3.33 for one stock split in March 1997 and
the conversion of the outstanding shares of the Company's preferred stock
upon the effectiveness of this Offering.
(2) EBITDA represents operating income excluding interest, taxes,
depreciation, amortization of goodwill and other intangible assets (as
presented on the face of the income statement). EBITDA is not a substitute
for net cash provided by operating activities or operating income in
accordance with generally accepted accounting principles. EBITDA is
presented because management believes that it is a widely accepted
financial indicator of a company's ability to service and/or incur
indebtedness, maintain current operating levels of fixed assets and
acquire additional operations and businesses. Accordingly, significant
uses of EBITDA include, but are not limited to, interest and principal
payments on long-term debt, including indebtedness under the Company's
credit agreement and capital expenditures. Items excluded from EBITDA,
such as interest, taxes, depreciation and amortization, are significant
components of the Company's operations and should be considered in
evaluating the Company's financial performance.
(3) The as adjusted summary balance sheet data has been prepared as if the
Offering had occurred as of December 31, 1996 and reflects the issuance of
the Securities offered by the Company hereby and the application by the
Company of the net proceeds therefrom. See "Use of Proceeds."

17
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information
contained in the financial statements, including the notes thereto, and the
other financial information appearing elsewhere in this Prospectus.

GENERAL

WebWorld is a high-volume commercial printer specializing in the printing of
multi-color freestanding magazines, catalogs, tabloids, inserts and mail
wraps. Historically, the Company has concentrated on the newsprint magazine
sector of the printing industry. Contracts with local newspapers for the
printing of weekly television guides accounted for 72% and 61% of the gross
sales for the fiscal years ended March 31, 1995 and 1996, respectively, and
37% of gross sales for the nine months ended December 31, 1996.

In March 1996, the Company experienced a fire that adversely affected its
operations for approximately six months. In September 1996, the Company
purchased certain assets of Webworks, which will allow it to expand more
rapidly into the coated paper segment of the commercial printing market. The
Company expects to realize significant economies of scale through combined
plant operations, information systems and accounting functions and through
increased operation of under-utilized equipment. The asset acquisition will
also expand the Company's post-press production services such as stapling,
binding, sorting and folding printed materials for mass mailings.

The existing contract for production and sale of the weekly The Dallas
Morning News TV Magazine expires January 1998. Other than this annual
contract, the Company has no significant long-term printing contracts. Most
sales come from individual orders for specific printing projects. Customer
satisfaction with the quality, pricing and delivery of each job is required
for continued engagement.

Paper is the largest cost component of the Company's sales. The price of
paper is volatile and may cause significant fluctuations in sales and cost of
sales. Paper prices, specifically newsprint prices, increased consistently
through the Company's fiscal year ended March 31, 1995 to a peak in July and
August 1995. Prices since that time have fallen as paper mill production has
increased. The Company generally is able to pass paper cost increases to its
customers and conversely paper cost decreases. There can be no assurance that
future price increases can be passed through to customers.

Results of Operations

The following table sets forth certain percentage relationships based on the
Company's statements of operations for the periods indicated:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
MARCH 31 DECEMBER 31
PERCENT OF PERCENT OF
NET SALES NET SALES
------------ ------------
1995 1996 1995 1996
----- ----- ----- -----
<S> <C> <C> <C> <C>
Sales............................................. 100.0% 100.0% 100.0% 100.0%
Cost of sales..................................... 81.4 85.7 85.3 82.8
----- ----- ----- -----
Gross profit...................................... 18.6 14.3 14.7 17.2
Selling, general and administrative expenses...... 7.6 8.1 8.4 9.1
Depreciation and amortization..................... 5.1 4.5 4.3 4.3
Management and consulting fees.................... 1.2 1.1 1.4 1.1
----- ----- ----- -----
Operating income.................................. 4.7 0.6 0.6 2.7
Interest expense (net)............................ 3.5 3.1 3.0 2.9
Other income...................................... 0.0 0.1 0.2 2.3
----- ----- ----- -----
Income (loss) before income taxes and
extraordinary item............................... 1.2 (2.4) (2.2) 2.1
Income taxes...................................... 0.4 (0.2) (0.2) 0.7
----- ----- ----- -----
Income (loss) before extraordinary item........... 0.8 (2.2) (2.0) 1.4
===== ===== ===== =====
</TABLE>

18
<PAGE>

Nine Months Ended December 31, 1996 Compared to Nine Months ended December
31, 1995:

Sales increased 16.1% from $11 million for the nine months ended December
31, 1995 to $12.8 million for the nine months ended December 31, 1996. Sales
increased primarily due to increases in sales of coated paper product services
primarily in the last three months of the current period. Sales of newsprint
items increased marginally despite a material increase in total units produced
due primarily to sales price reductions resulting from a decrease in newsprint
prices of 25% beginning in August 1995 and continuing through December 1996.
Paper costs as a percent of gross sales at the Company went from a high of 62%
in July 1995 to 41% for the month of December 1996. Newsprint paper costs are
generally passed through at cost to the Company's major customers.

Gross profit increased 36% or $585,000, from $1.6 million and 15% of sales
for the nine months ended December 31, 1995 to $2.2 million and 17% of sales
for the nine months ended December 31, 1996. The gross profit as a percent of
sales increase is due to the higher margins associated with coated paper
products and due to lower newsprint paper prices in the current year. Material
costs decreased 8% as a percent of sales during the nine months ended December
31,1996 as compared to the nine months ended December 31, 1995. The cost
decrease was due to the net reduction in newsprint prices during the period
and a $440,000 job completed during the third quarter in which the customer
supplied the paper, which at an average paper cost of 42% had a 1.5% effect on
the gross profit margin. The decrease in material costs as a percent of sales
was partially mitigated by an increase of 4% in labor costs as a percent of
sales during the same period. The labor cost increase was due to the newsprint
paper cost reductions and the resultant gross sales decrease applied to a
constant labor cost on a units-produced basis and increased overtime during
the last three months of 1996 resulting primarily from a large, non-recurring
job.

Selling, general and administrative expenses increased as a percent of sales
from 8.4% for the nine months ended December 31, 1995 to 9.1% for the nine
months ended December 31, 1996 due primarily to the temporary maintenance of
separate plant and administrative facilities in conjunction with the purchase
of the Webworks' assets and the short-term lease of its facility.

Operating income totaled $66,000, or $350,000, for the nine months ended
December 31, 1995 and 1996, respectively. The operating income increase is due
to the increased sales and gross profit resulting from increased sales in
higher margin coated paper and decreased newsprint paper prices mitigated by
the temporary increase in selling, general and administrative expenses. The
initially filed Registration Statement contained unaudited financial
statements for the nine months ended December 31, 1996. Operating income
reflected in the unaudited financial statements was $400,000. The audited
financial statements for the nine months ended December 31, 1996 subsequently
added to the Registration Statement reflects operating income of $350,000. The
decrease in operating income in the audited financial statements was due to an
adjustment reflecting an increase in selling, general and administrative
expense.

Interest expense increased 12% from $335,000 for the nine months ended
December 31, 1995 to $375,000 for the nine months ended December 31, 1996, due
to an increase in the average debt balance in the revolving line of credit and
an increase in the average interest rate paid on term debt caused by
additional subordinated debt incurred in conjunction with the acquisition of
the Webworks assets.

Operations for the nine months ended December 31, 1996 included a gain of
$271,265 relating to the insurance settlement for the Company's claim arising
from the March 1996 fire at its facilities and an extraordinary loss, net of
income tax benefit, of $72,500 relating to the early retirement of debt.

Fiscal Year Ended March 31, 1996 Compared to Fiscal Year ended March 31,
1995:

Sales increased 19% from $12.0 million for fiscal year 1995 to $14.3 million
for fiscal year 1996 due to increased sales levels. Sales to The Dallas
Morning News increased 18% from $6.7 million to $7.9 million for fiscal year
1995 and fiscal year 1996, respectively. Sales to other customers increased
21% and $1.1 million during the same period. The increase was due to an
increase in sales and marketing efforts and to higher pass-through paper
prices.

Gross profit decreased 8% from $2.2 million for fiscal year 1995 to $2.05
million for the year ended March 31, 1996. Gross profit decreased as a percent
of sales from 18.6% for fiscal year 1995 to 14.3% for fiscal 1996 due to
increases in paper prices and labor. Material costs, including paper, ink,
plates and supplies increased

19
<PAGE>

as a percent of sales from 60.1% for fiscal year 1995 to 63.7% for fiscal year
1996 due to an increase in the average cost of paper, primarily newsprint, in
fiscal year 1996 as compared to fiscal year 1995. Labor costs as a percent of
sales increased from 14.7% for fiscal year 1995 to 15.2% for fiscal year 1996
due to increased overtime hours worked.

Selling, general and administrative costs increased as a percent of sales
from 7.6% for fiscal year 1995 to 8.1% for fiscal year 1996 due primarily to
an increase in the sales and marketing and executive staff.

Based on the above factors, operating income decreased 86% from $567,000 for
fiscal year 1995 to $80,000 for fiscal year 1996.

Interest expense increased 6% from $421,000 for fiscal year 1995 to $445,000
for fiscal year 1996, primarily due to a higher average loan balance
outstanding for fiscal year 1996 as compared to the average loan balance
outstanding for fiscal year 1995. Principal payments made on term debt during
fiscal year 1996 of $637,000 were mitigated by a net increase of $850,000 on
the revolving line of credit and equipment-backed term debt.

Recent Results of Operations

In January and February of 1997, the Company experienced a significant loss
from operations caused by a shortfall in sales as compared to expectations and
an inability to reduce direct labor in a commensurate amount due to the timing
of jobs produced. March sales improved to expected levels; however, management
estimates that the loss for the fourth quarter ended March 31, 1997 will equal
or exceed the amount of income before extraordinary item as reported for the
nine months ended December 31, 1996. Management believes that operations for
the fourth quarter of fiscal 1997 are not indicative of future performance;
however, no assurance can be given that the net loss incurred during this
quarter will not continue.

Liquidity and Capital Resources

The Company has historically met its liquidity and capital investment
requirements through internally generated funds and external financing. Cash
flow provided by (used in) operations was ($73,311) and $31,445 for the fiscal
years 1995 and 1996, respectively, and $431,195 for the nine months ended
December 31, 1996. Working capital was $142,000 on March 31, 1996 and
($1,010,000) at December 31, 1996. The negative working capital balance at
December 31, 1996 is due primarily to the refinancing of the Company's debt on
December 31, 1996 and the recognition of an accrual for equipment installation
costs. The Company had net accounts receivable of $1.72 million and $2.72
million at March 31, 1996 and December 31, 1996, respectively. The increase in
these receivables reduced the net cash provided by operating activities during
the nine months ended December 31, 1996. The average collection period for the
Company's accounts receivable for the year ended March 31, 1996 and nine
months ended December 31, 1996 was 44 and 58 days, respectively. The increase
in the average collection period was attributable to the decline, as a
percentage of sales, in print jobs for local newspapers (which generally
provide for payment within 20 days from date of invoice), as contrasted with
typical payment terms of 45 to 60 days for other customers.

Congress has provided the Company revolving credit, equipment, real estate
and future capital expenditure financing facilities totaling $9.0 million, of
which $4.7 million was drawn at December 31, 1996. An additional $2.3 million
was available on such date under such revolving credit facility, and an
additional $2.0 million was available through the capital expenditure
facility. See "Use of Proceeds" with respect to the terms of the revolving
credit facility. The capital expenditure facility's term runs concurrently
with the term of the revolving credit facility and provides financing for up
to 85% of the value of the equipment purchased. These borrowings would be
payable over five years or by the termination of the facilities. The
indebtedness to Congress is secured by a lien on all of the Company's assets,
including a mortgage on the Company's printing facility.

Financing activities during the nine months ended December 31, 1996 related
primarily to the December 1996 refinancing of the indebtedness incurred in the
September 1996 Webworks asset acquisition, as well as replacing the Company's
revolving credit line and retiring subordinated debt.

20
<PAGE>

Investment activities included capital expenditures of $193,000 and $266,000
for fiscal years 1995 and 1996, respectively, and a $2.02 million increase in
gross fixed assets for the nine months ended December 31, 1996, including
$1.59 million in assets purchased from Webworks and $396,000 in expenditures
to replace equipment and repair building damage related to the March 1996
fire. The remaining capital expenditures reflect normal and customary costs
associated with the continued operation and upgrading of existing machines.

The Company plans to make capital purchases of approximately $2.0 million
after completion of the relocation of certain of its assets to a new facility
to increase its pre-press and post-press capabilities, including $300,000 to
increase the capacity and performance of an existing press.

The Company has also executed an agreement to lease, and a contract to
purchase, a facility adjacent to its existing building to accommodate the
Company's expansion for the acquisition of the Webworks assets and additional
post-press equipment. The purchase price (if the purchase is consummated) and
the cost of upgrading leasehold improvements should approximate $1.7 million
and $250,000, respectively. Capital expenditures, the building purchase and
improvements and additional asset acquisitions are expected to be financed
through internally generated funds, the proceeds from this Offering and funds
available under the Congress revolving credit facility.

21
<PAGE>

BUSINESS

WebWorld owns and operates a commercial printing facility and offers pre-
press, printing and post-press services to mid- and large-sized customers in
the Southwestern United States. Through its high production web presses the
Company offers a broad range of services, including printing magazines,
catalogs, tabloids, inserts and mail wraps on a range of paper stocks. Through
pre-press and post-press production services, the Company provides customers
with services such as converting supplied data and information into printing
plates and stapling, binding, sorting and folding printed materials for mass
mailings. The Company primarily uses high production web presses to print
materials which are often mass produced and distributed; for example, the
Company prints the weekly edition of The Dallas Morning News TV Magazine.
WebWorld believes a large part of its success to date has resulted from its
ability to make three strategic acquisitions which increased its printing
capabilities, provided greater purchasing efficiencies and increased operating
efficiencies through overhead reductions as a percentage of sales while
expanding the scope of printing related services offered to its customers.

BUSINESS STRATEGY

The Company has increased shareholder value by making strategic acquisitions
and quickly integrating operations to produce efficiencies in materials, labor
and overhead. These actions have enabled the Company to provide the customer
service and attention to detail of a small printer with the diverse capability
and economic advantage of a large printer.

The Company plans to grow its business through the following expansion
strategy:

. Implement Integrated Commercial Web Press Facility. With the acquisition
of the presses from Webworks and the planned relocation of these presses
to the Company's facilities, the Company will have nine presses, five of
which are high production web presses, in a centralized location. This
critical mass of printing capability enables the Company to print a
variety of commercial, high volume materials and to dedicate presses to
the type of paper stock, reducing clean-up time and achieving a higher
press utilization rate. In addition to expanded production capabilities,
a concentration of high production presses in one location as compared
to presses scattered among several locations allows the Company to
minimize delivery and transportation costs and to achieve other
operational efficiencies. The Company intends to increase its pre-press
and post-press production services to appeal to a diversified customer
base. The Company believes that developing a series of high capacity,
integrated web press facilities capable of servicing the needs of most
mid-to-large size users of commercial printed materials will provide a
sustainable, competitive advantage.

. Strategic Acquisitions. The commercial printing industry is highly
fragmented and continues to undergo consolidation at all levels to meet
changing customer demands. The Company plans to target acquisitions of
web printers which will diversify its customer base, business mix and
geographical coverage. Acquisition targets would be required to have
characteristics which would enable rapid consolidation and integration
into existing operations and produce cost savings and overhead
reductions.

. Single-Source Service Provider. WebWorld intends to expand its pre-press
and post-press capabilities to provide a one-stop service for many of
its customers. The Company intends to purchase additional equipment to
expand the Company's pre-press and post production services such as high
speed binding and stitching, ink jetting, in-line finishing and mailing.
These value-added services often produce higher margins than printing
alone and are in demand by high-volume users.

. Develop Direct Marketing. In order to develop its long-term
relationships with a broad and diverse customer base, WebWorld is
expanding its in-house marketing staff. The objective of this program is
to produce a base of recurring printing jobs on a regularly scheduled
basis and then seek higher margin value-added opportunities to utilize
additional capacity. By expanding the in-house marketing efforts, the
Company plans to decrease its historical pattern of using print brokers
to fill excess capacity.

22
<PAGE>

INDUSTRY BACKGROUND

The commercial printing industry is one of the largest and most fragmented
manufacturing industries in the United States, with total 1995 sales estimated
at $124 billion by Printing Industries of America, Inc. ("PIA"), a national
trade organization. PIA has estimated that there were approximately 25,174
commercial printing companies in the nation in 1995. Of these, approximately
13% (or 3,262) had over 20 employees. The printing services market includes
general commercial printing, financial printing, printing and publishing of
books, printing and publishing of newspapers and periodicals, quick printing,
and production of business forms and greeting cards. Within the printing
services market, the Company serves a portion of the general commercial
printing sector, which had total U.S. sales of approximately $40 billion in
1995, based on PIA sources.

OPERATIONS

There are a number of different printing processes, each with its own
distinguishing qualities and appearance characteristics. Short to medium run-
length commercial work generally is printed on sheet-fed presses, while long-
run commercial printing projects typically are printed on web presses in which
the paper is fed through the press from a large roll. The ink on printed
materials may be air-dried, which is generally a lower cost method but creates
a product that can be easily smeared, such as newsprint. Alternatively, ink
can be dried in a heatset process which uses ovens to create a brighter, more
durable finish. Over 90% of the Company's press capabilities are heatset.
Paper varies by type and appearance, including newsprint, coated stock, off-
set and hi-brite. Coated stock is associated with a glossier, brighter finish
such as for magazines and some catalogues while newsprint is used for
newspapers and other mass-produced products.

The Company was incorporated in 1993 and acquired in 1994 the business of
Newspaper Enterprises, Inc., which primarily printed The Dallas Morning News
TV Magazine. Also in 1994, the Company acquired certain assets of Computer
Language Research, Inc., including three half-web presses and certain post-
production equipment. In September 1996, the Company purchased two full web
presses from Webworks, which has enabled the Company to increase operating
efficiencies by assigning presses to generally run specific types of paper
stocks. The three-month period ending December 31, 1996 was the first quarter
to reflect increased customer growth including certain customers who
previously did business with Webworks. In this quarter, revenues were $5.5
million compared to $3.8 million in the quarter ended September 30, 1996,
representing an increase of 45%.

The Company currently operates nine presses that vary in size and speed and
can produce printed materials that range in page size, type of paper, number
of pages and the amount of color required. Of the nine presses, five are full
web presses, three are half-web presses and one is a sheet fed press. The
paper used in a full web press is generally 35 inches in width while the paper
printed on a half web press is generally 17 1/2 inches in width. All of the
Company's web presses use offset printing, which is a printing process
involving the transfer of an inked impression from a thin metal plate to a
rubber blanket and finally to the paper. In the web offset printing process,
the paper is fed through the press from a large roll of paper and is printed
on both sides of the paper. By varying the size and capabilities of its
presses, the Company can simultaneously perform of variety of printing jobs on
a cost-effective basis. The Company believes that it can compete effectively
in the Southwestern United States market place for many types of printing
products having medium to large print runs as well as time sensitive products
of any size.

23
<PAGE>

The Company currently operates the following presses:

<TABLE>
<CAPTION>
TYPE OF PRESS NAME SPECIFICATIONS
------------- ---- --------------
<C> <C> <S>
Full Web Presses: Hantscho Mark IV Web Heatset Perfecting Offset 22.75" Cutoff, 8 units
with 5 roll stands,
Inline fold, glue and
trim
Hantscho Mark II Web Perfecting Offset 22.75" Cutoff, 8 units
with 2 roll stands,
Inline fold
Harris 800 Heatset Web Perfecting Offset Double round 22.75"
Cutoff, 6 units with 3
roll stands, Inline
fold, glue and trim
Harris M200 Heatset Web Perfecting Offset 22.75" Cutoff, 8 units
with 2 roll stands,
Inline fold
Goss SSC Non-heatset Web Perfecting Offset 22.75" Cutoff, 8 units
with 3 roll stands,
Inline fold, glue and
trim
Half Web Presses: Didde Webcom 700 with U.V. dryers. 22" cutoff, 8 units,
sheeter
Didde Glaser DG175-B Non-Heatset 22" cutoff, 4 units,
sheeter
Didde Glaser 860 Non-Heatset 22" cutoff, 4 units,
sheeter
Sheet Fed Press: AB Dick 9850 Press with T Head
</TABLE>

Although the Company has to date been able to acquire its printing presses
at prices less than their replacement costs, there is no assurance that it
will continue to be able to do so. See "Risk Factors--Nature of Commercial
Printing Business." A new press offering comparable characteristics to the
full web heat set presses operated by the Company generally ranges in price
from $6 to $12 million.

WebWorld also offers services in the pre-press and post-press operations.
Commercial pre-press services involve photographically duplicating mechanical
images and/or digitally producing images, separating color images into process
colors, assembling films and burning the film images onto plates. The post-
press operations provided by the Company include cutting, trimming, folding,
binding, finishing and distributing the finished product. The Company has 10
major pieces of post-press equipment to perform these functions. The Company
plans to expand its packaging and distribution services to handle bulk
shipments and mass mailings in order to meet customer needs and to increase
its higher margin services.

The Company's sense of urgency and scheduling flexibility allow it to
consistently react to its customers' requirement. Because of the need for
rapid implementation of printing projects, from conception through delivery,
the Company must maintain physical plant and customer service staff which
allow it to maximize work loads when called upon to do so. Consequently, the
Company does not always operate at full capacity.

The Company continuously reviews its printing equipment needs and evaluates
advances in computer software, hardware and peripherals, computer networking
and telecommunication systems as they relate to the Company's operations.
WebWorld is installing a printing software program and has hired a full-time
employee to integrate the program with the Company's production and financial
systems in order to develop a comprehensive management information system.

SERVICES

The Company believes that by operating printing presses that vary in size
and capabilities, it can offer a broad range of printing and printing related
services. The Company's categories of its printed materials are as follows:

24
<PAGE>

. Magazines. The Company prints a variety of magazine products utilizing
various printing technologies. The Company is able to print materials
that combine different paper types and are bound and trimmed in a single
operation. Other magazines are produced on various presses and bound in
off line operations. Portions of magazines are also printed for
inclusion with other materials in a final product. Magazines are
normally repetitive and run on pre-defined schedules. The Company's
customers in this area include a daily newspaper and a large public
university.

. Catalogs. The Company prints a variety of catalogs, the basic production
of which is essentially the same as a magazine. The catalog segment
tends to be seasonal in nature and is much more sensitive to economic
conditions. The Company's customers in this segment include local
community colleges and several large universities.

. Tabloids. The Company prints a variety of tabloids which resemble
newspapers in various sizes. Tabloids range in size and complexity based
on subject matter. Tabloids are often found inside of newspapers, in
magazine racks and are sold through subscription in highly targeted
markets. The Company's customers in this segment include local daily
newspapers, a state lottery commission and local municipalities.

. Inserts and Mail Wraps. The Company prints inserts and mail wraps to
support the direct mail market place. The focus of this line is in
smaller to medium sized markets where a variety of products are
required. The Company's customers in this segment include local daily
newspapers and marketing companies.

MARKETING AND SALES

The Company's business is service-oriented, and its primary marketing focus
is on responding rapidly to customer requirements. Responsiveness is essential
because of the typically short lead time on most printing jobs handled by the
Company. The Company's printing operations are designed to maintain maximum
flexibility to meet customer needs both on a scheduled and an emergency basis.
The Company targets those printing runs that will best utilize its equipment,
expertise and market orientation, and will maximize its profitability. Another
important aspect of the Company's marketing strategy is attention to quality
and price.

The Company initially focused its marketing efforts on its relationship with
The Dallas Morning News and filled excess capacity by selectively bidding
printing jobs through independent print brokers. The Company is now developing
an in-house professional marketing team and has recruited a sales staff of six
full time employees whose experience in the printing industry range from four
to 30 years. The marketing team is led by a Vice President of Sales and
Marketing who has over 14 years of sales experience with commercial printers.
Because the printing business requires a great deal of interaction with
customers, including personal sales calls, art work reviews, reviews of color
and other proofs and "press checks" (customer approval of the printed piece
while it is on the printing press), the Company's increasing emphasis on in-
house marketing efforts rather than print brokers would allow the Company to
develop more independent client relationships and to have greater interaction
with the end user of the printed products. Through its salespeople and other
management professionals, the Company will be able to develop stricter control
of the printing process from the time a prospective customer is introduced,
through credit checks, pricing, scheduling, pre-press, printing and post-press
operations.

CUSTOMERS

Due to the project-oriented nature of customers' printing requirements,
sales to particular customers may vary significantly from year to year
depending upon the number and size of their projects. The Company's single
largest customer is The Dallas Morning News, which accounted for approximately
56% and 55% of the Company's sales in fiscal 1995 and 1996, respectively.
Because of increased sales volume to other customers, The Dallas Morning News
accounted for approximately 36% of the Company's sales in the first nine
months of fiscal 1997.

25
<PAGE>

The Company's predecessor entered into an agreement with The Dallas Morning
News in 1978, and this agreement has been renewed for successive terms ranging
in duration from one to three years. The Company's current contract expires in
January 1998.

PURCHASING AND RAW MATERIALS

The Company purchases various materials, including paper, ink, film, offset
plates, chemicals and solvents, glue and wire, from a number of suppliers. The
Company's most significant expenditures are for paper. The Company purchases
paper directly from a number of manufacturers and distributors. In general,
the Company has not experienced any significant difficulty in obtaining raw
materials necessary for its operations. The price of paper, however, has
experienced much volatility in recent years, and future increases in the price
of paper could adversely impact the Company's operating costs and its
financial performance.

FACILITIES AND CAPABILITIES

The Company owns a 60,000-square foot facility on six acres of land in an
industrial park located in Dallas, Texas. Approximately three acres are
available for expansion. The original 45,000 square foot building was
constructed in 1971 and an additional 15,000 square feet were added in 1981. A
portion of this facility was damaged in a fire in March 1996. Although the
fire resulted in substantial damage to the Company's electrical and mechanical
systems, these systems have now been repaired and up-graded. Congress and
Webworks have a lien on this property.

In September 1996, the Company entered into a one-year lease with Webworks
to continue the operation of the presses purchased from Webworks in its
existing facility until the Company's facilities could be expanded to
consolidate all operations. The Company has entered into a five-year lease for
an approximately 84,000 square foot building adjacent (but not attached) to
the Company's owned facility, and a contract to purchase the facility by
December 31, 1997. The Company is relocating the former Webworks assets to the
Company's facilities prior to September 1997. In connection with relocating
the assets acquired from Webworks to the Company's facilities, the two
printing presses acquired from Webworks will be dismantled in the existing
facility and reassembled in the Company's other facilities. The Company
estimates that each press will be out of operation for two to six months. In
connection with the relocation, and the Company plans to stagger the
relocation of the presses so one of the presses will be operating at all
times.

WebWorld does not anticipate the relocation of these presses to adversely
impact its ability to service existing business. Excess capacity is currently
being reserved, at the expense of new sales, to ensure its ability to meet all
customer commitments. Proper scheduling of existing resources and negotiations
with clients should allow for some excess capacity during this period.
Potential negative sales impact may be felt in the Company's ability to
rapidly respond to new short-term sales opportunities. In addition, there can
be no assurance that the relocation will be timely completed, that the costs
will not be in excess of estimated costs or that the operation of printing
presses to be relocated will not be materially impaired as a result of the
relocation. If unexpected problems occur with the printing presses or the
relocation in general, the Company's operations and financial performance will
be materially and adversely impacted.

COMPETITION

The Company competes with a number of other commercial printers, some of
which are subsidiaries or divisions of companies having greater financial
resources than those of the Company. Because of the nature of the Company's
business, most of the Company's competition is in the local printing market.
The major competitive factors in the Company's commercial printing business
are ongoing customer service, quality of finished products and price. Customer
service often is dependent on production and distribution capabilities and
availability of printing time on equipment which is appropriate in size and
function for a given project. In addition, competition in the commercial
printing area is based upon the ability to perform the services described with
speed and accuracy. Price and the quality of supporting services are also
important in this regard. WebWorld believes it competes effectively on all of
these bases.

26
<PAGE>

EMPLOYEES

As of December 31, 1996, the Company had a total of 144 employees (of which
18 were in administration, seven in sales and marketing and 119 in
operations), 39 of whom were salaried or commissioned employees and 105 of
whom were hourly employees. None of its employees are represented by a
collective bargaining agreement. The Company considers its relationship with
its employees to be good.

LEGAL PROCEEDINGS

From time to time the Company is involved in litigation relating to claims
arising out of its operations in the normal course of business. While the
Company maintains insurance coverage against potential claims in an amount
which it believes to be adequate, there can be no assurance that the Company's
insurance coverage will be adequate to cover all liabilities arising out of
such claims or that any such claims will be covered by the Company's
insurance. While the outcome of lawsuits or other proceedings against the
Company cannot be predicted with certainty, the Company does not believe these
matters will have a material adverse effect on its business or financial
position.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

The Company is subject to the environmental laws and regulations of the
United States and the state of Texas concerning emissions into the air,
discharges into waterways and the generation, handling and disposal of waste
materials. Responsible agencies include, but are not limited to, the U.S.
Environmental Protection Agency, the Texas Natural Resource Conservation
Commission and regulatory agencies at the county and local level. The printing
business generates substantial quantities of inks, solvents and other waste
products requiring disposal under the numerous federal, state and local laws
and regulations relating to the environment. The Company typically recycles
waste paper, returns salvageable waste ink to its suppliers and contracts for
the removal of other waste products. The Company believes it is in substantial
compliance with all applicable air quality, waste disposal and other
environmental-related rules and regulations as well as with other general
employee health and safety laws and regulations. However, there can be no
assurance that future changes in such laws and regulations will not have a
material effect on the Company's operations.

27
<PAGE>

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The following table sets forth certain information concerning the persons
who are (i) executive officers, (ii) key employees or (iii) directors.

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- --- -----------
<S> <C> <C>
Barry B. Conrad....... 56 Chairman of the Board and Director
Richard J. Wiencek.... 58 Chief Executive Officer, President and Director
Bruce E. Fredriks..... 48 Vice President--Finance and Administration, Chief
Financial Officer, Treasurer and Secretary
Charles B. Combs, 64 Vice President--Engineering
Jr...................
Christopher A. 41 Vice President--Sales and Marketing
Schall...............
Dale H. Davenport..... 49 Vice President--Operations
Floyd W. Collins...... 44 Director
Brian A. Harpster..... 52 Director
Robert D. Kopitke..... 55 Director
</TABLE>

Barry B. Conrad has served as Chairman of the Board and a director of the
Company since the Company's inception. Mr. Conrad is a co-founder and Managing
Partner of Conrad/Collins Merchant Banking Group Ltd., a Dallas, Texas-based
merchant bank formed in 1988 that is active in leveraged buyouts of middle-
market companies in the Southwestern United States. Mr. Conrad has extensive
experience in investment banking, including more than five years as head of
corporate finance for Rauscher Pierce Refsnes, Inc. Prior to joining Rauscher
Pierce Refsnes, Inc. in 1983, he served for approximately ten years as Chief
Executive Officer of Hart Delta, Inc., a pharmaceutical manufacturing firm. He
also serves on the Board of DSI Toys, Inc.

Richard J. Wiencek has been the President and Chief Executive Officer of the
Company and a director since the Company's inception. Prior to co-founding the
Company, Mr. Wiencek served in various executive positions with Computer
Language Research, Inc., a software development company, for 15 years, most
recently as Group Vice President, Corporate Operations. Mr. Wiencek's
responsibilities at Computer Language Research, Inc. included managing print
operations, telecommunications and product marketing as well as implementing a
corporate automation strategy connecting clients and employees nationwide
through common communications networks and standardized application software.
Prior to joining Computer Language Research, Inc., Mr. Wiencek served for
approximately 14 years in various financial and operations management
positions with Texas Instruments, Inc.

Bruce E. Fredriks has served as the Vice President--Finance and
Administration and Chief Financial Officer of the Company since May 1996.
Prior to joining the Company, he was an account executive with Business
Systems Engineering Inc. From 1972 through November 1995, Mr. Fredriks was
with Caltex Petroleum Corporation, an international petroleum company, where
he held various executive and managerial positions both domestically and
internationally, most recently as Coordinator in Accounting Policies and
Controls. Mr. Fredriks is a certified public accountant.

Charles B. Combs, Jr. has served as the Vice President--Engineering since
1995. He has over 40 years experience in the printing industry, including all
aspects of printing such as pre-press, press, finishing and administration.
Prior to joining the Company, he was the Chief Operating Officer for Anchor
Press, a commercial printing company, in Fort Worth from 1993 to 1994. From
1987 to 1993, Mr. Combs owned and operated his own company, Combs
International Graphics, which designed, constructed and installed large
printing facilities in the United States and Africa.

Christopher A. Schall joined the Company in June 1996 as Vice President--
Sales and Marketing. Prior to joining the Company, he was Vice President of
Sales with Proctor Press, Inc., a printing company, from 1994 to

28
<PAGE>

1996. Prior to joining Proctor Press, Inc., he was a Senior Sales
Representative with Hoechstetter Printing Company, a commercial printing
company, from 1990 to 1994.

Dale H. Davenport joined the Company in February 1997 as the Vice
President--Operations. He has over 25 years experience in the printing
industry, including sales, operations and administration. Prior to joining the
Company, he was the Plant Manager for KOPCO, Inc., a printing company, from
1994 to 1997. From 1992 to 1994, Mr. Davenport was the General Manager for
Sierra Press, a printing company.

Floyd W. Collins has served as a director of the Company since March 1997.
Mr. Collins has been a co-founder and Managing Partner of MBG since 1988. Mr.
Collins has an extensive background in private equity investing, including
service as Executive Vice President of Hickory Venture Capital Corporation and
General Partner of Sunwestern Investment Group.

Brian A. Harpster has served as a director since February 1994. Mr. Harpster
has been engaged in investment and financial consulting for more than the past
five years through the ownership and management of Holly Investments, L.P.,
and Offshore Consulting Services, Inc.

Robert D. Kopitke has served as a director since February 1994. Mr. Kopitke
has been engaged in general business consulting for more than the past five
years as President of The Gensal Group, Inc.

BOARD OF DIRECTORS

Upon the consummation of the Offering, the Board of Directors of the Company
will consist of five members. Each director will hold office until the annual
meeting of the shareholders of the Company next following his election, until
his successor is elected and qualified. The holders of the shares of Common
Stock, voting separately as a class, will be entitled to elect all of the
directors. The Representatives have the right to nominate an advisory director
to the Company's Board of Directors. See "Underwriting."

Directors who are employees of the Company do not receive additional
compensation for serving as directors. Each director who is not an employee of
the Company will receive an annual fee of $5,000 as compensation for his or
her services as a member of the Board of Directors. All directors of the
Company are reimbursed for out-of-pocket expenses incurred in attending
meetings of the Board of Directors or committees thereof, and for other
expenses incurred in their capacities as directors of the Company. Directors
will also be eligible to participate in the Company's stock option plan. See
"Stock Option Plan".

In February 1994, the Company also entered into a management agreement with
MBG, of which Barry B. Conrad, the Chairman of the Board of the Company, and
Floyd W. Collins, a director of the Company, are principals. Under the terms
of the agreement, MBG provided supervisory management services to the Company,
including the negotiation, financing and consummation of all of the
acquisitions made by the Company. MBG has earned as fees $100,000, $100,000,
and $125,000 during fiscal years 1995 and 1996 and for the nine months ended
December 31, 1996, respectively. Pursuant to the management agreement, the
Company granted MBG an option to purchase 83,250 shares of common stock at an
exercise price of $.30 per share. As of April 1996, all the options became
fully vested, and were exercised.

In February 1994, the Company entered into a sales consulting agreement with
Robert D. Kopitke under which Mr. Kopitke earned as fees $30,000, $30,000, and
$ 52,500 during fiscal years 1995 and 1996 and the nine months ended December
31, 1996, respectively. Pursuant to such agreement, the Company granted Mr.
Kopitke an option to purchase 83,250 shares of Common Stock at an exercise
price of $.30 per share. As of April 1996, all the options became fully vested
and were exercised. The agreement was terminated, effective April 30, 1997,
although Mr. Kopitke will be paid on a project basis for any future sales
consulting performed for the Company.

29
<PAGE>

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has established two committees: a Compensation
Committee and an Audit Committee. Each of these committees has two or more
members who serve at the discretion of the Board of Directors. The
Compensation Committee, currently comprised of Messrs. Conrad, Wiencek and
Kopitke, is responsible for reviewing and making recommendations to the Board
of Directors with respect to compensation of executive officers, other
compensation matters and awards under the Company's stock option plan. The
Audit Committee, currently comprised of Messrs. Collins, Kopitke and Harpster,
is responsible for reviewing the Company's financial statements, audit
reports, internal financial controls and the services performed by the
Company's independent public accountants, and for making recommendations with
respect to those matters to the Board of Directors.

EXECUTIVE COMPENSATION

The following summary compensation table sets forth the total annual
compensation paid or accrued by the Company to or for the account of the Chief
Executive Officer who was the only executive officer of the Company whose
total cash compensation for the fiscal years ended March 31, 1995 and 1996
exceeded $100,000:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------- ALL OTHER
FISCAL SALARY BONUS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) $ ($)(1)
--------------------------- ------ -------- ------- ------------
<S> <C> <C> <C> <C>
Richard J. Wiencek, President and CEO 1996 $168,000 $26,813 $5,102
1995 $160,000 12,944 $4,453
</TABLE>
- --------
(1) Represents the Company's contribution under the Company's 401(k) savings
plan and premiums paid by the Company on a life insurance policy, the
beneficiary of which is Mr. Wiencek's estate.

The Company entered into an employment agreement with Richard J. Wiencek,
the Company's President and Chief Executive Officer, in February 1994. The
agreement provided for an initial term of five years and an automatic renewal
for additional successive one year terms. The agreement also provided for a
base salary of $160,000 (subject to annual increases in the discretion of the
Company's Board of Directors) and annual bonuses equal to 25% of the Company's
"free cash flow" as defined in the agreement. In April 1997, the Company
amended and restated the Employment Agreement with Mr. Wiencek to provide for
a three year term ending March 31, 2000. The new agreement provides for a base
salary of $168,000 (subject to annual increase in the discretion of the
Compensation Committee of the Company's Board of Directors) and the right to
participate in such bonus and other benefit plans as determined by the
Compensation Committee.

STOCK OPTION PLAN

The Company maintains the NEI WebWorld, Inc. Stock Option Plan (the "Option
Plan") which provides for the grant of options to eligible employees and
directors for the purchase of Common Stock of the Company. The Option Plan
covers, in the aggregate, a maximum of 350,000 shares of Common Stock. The
Option Plan provides for the granting of both incentive stock options (as
defined in Section 422 of the Internal Revenue Code of 1986) and nonqualified
stock options (options which do not meet the requirements of Section 422).
Under the Option Plan, the exercise price may not be less than the fair market
value of the Common Stock on the date of the grant of the option. No options
have been granted under the Option Plan.

30
<PAGE>

The Compensation Committee of the Board of Directors (the "Committee")
administers and interprets the Option Plan and is authorized to grant options
thereunder to all eligible employees of the Company, including officers. The
Committee designates the optionees, the number of shares subject to the
options and the terms and conditions of each option. Options under the Option
Plan generally vest over a five year period. Certain changes in control of the
Company will cause the options to vest immediately. Each option granted under
the Option Plan must be exercised, if at all, during a period established in
the grant which may not exceed 10 years from the later of the date of grant or
the date first exercisable. An optionee may not transfer or assign any option
granted and may not exercise any options after a specified period subsequent
to the termination of the optionee's employment with the Company.

OPTION GRANTS

None of the Company's executive officers were granted options during the
year ended March 31, 1996. The Company has no outstanding options to purchase
shares of its capital stock.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Company's Board of Directors consists of
three members, Messrs. Conrad, Wiencek and Kopitke. No executive officer of
the Company serves as a member of the board of directors or compensation
committee of any entity which has one or more executive officers serving as a
member of the Company's Board of Directors or Compensation Committee.

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

The Company's Articles of Incorporation limit the liability of directors of
the Company to the Company or its shareholders to the fullest extent permitted
by Texas Business Corporations Act (the "TBCA").

WebWorld's Bylaws provide that the Company shall indemnify each of its
directors and officers, acting in such capacity, so long as such person acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Company. Such indemnification may be made
only upon a determination by the Board of Directors that such indemnification
is proper in the circumstances because the person to be indemnified has met
the applicable standard of conduct to permit indemnification under the law.
The Company is also required to advance to such persons payment for their
expenses incurred in defending a proceeding to which indemnification might
apply, provided the recipient provides an undertaking agreeing to repay all
such advanced amounts if it is ultimately determined that he is not entitled
to be indemnified.

The Company has entered into indemnification and hold harmless agreements
with each of its directors, whereby the Company is required to indemnify such
persons to the fullest extent permitted by law.

As of this date hereof, there is no pending litigation or proceeding
involving a director, officer, employee or agent of the Company where
indemnification will be required or permitted, and the Company is not aware of
any threatened litigation or proceeding which may result in a claim for such
indemnification.

Insofar as indemnification for liabilities arising from the Act may be
permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.

31
<PAGE>

CERTAIN TRANSACTIONS

The Company believes that all of the transactions set forth below were made
on terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. All future transactions, including loans, between
the Company and its officers, directors, principal shareholders and
affiliates, will be approved by a majority of the Board of Directors,
including a majority of the independent and disinterested outside directors,
and will be on terms no less favorable to the Company than could be obtained
from unaffiliated third parties.

In April 1996, the Board of Directors of the Company vested all of the
outstanding options granted in 1994 (covering an aggregate of 416,250 shares
of Common Stock) under certain agreements with Mr. Wiencek, MBG and Mr.
Kopitke. These shareholders exercised the outstanding options in April 1996
and purchased the underlying shares of Common Stock. In connection with this
exercise, Mr. Wiencek issued a note to the Company in the principal amount of
$75,000 which becomes due and payable in April 2001. Each of MBG and Mr
Kopitke issued a note to the Company for the exercise price of its options in
the principal amount of $25,000 which has the same terms as the note issued by
Mr. Wiencek. These notes, which are with recourse, bear interest at a per
annum rate of 6% and repayment of the notes is secured by a pledge of the
shares of Common Stock issued upon the exercise of the options. In the future,
no loans will be made to officers, directors, promoters, shareholders who own
more than 5% of the outstanding shares of Common Stock after completion of
this Offering or their affiliates except for bona fide business purposes.

The Company has entered into a management agreement with MBG, an affiliate
of two of its directors, and an employment agreement with its president and
previously had entered into a consulting agreement with a director. See
"Management--Board of Directors" and "--Executive Compensation."

In connection with the organization of the Company and the funding of the
Company's acquisition of Newspaper Enterprises, Inc. in February 1994, MBG and
Holly Investments, L.P. contributed $500,000 and $250,000, respectively, to
the Company and received an aggregate of 58% and 29%, respectively (after
giving effect to the conversion of outstanding shares of preferred stock and
dividends accrued thereon), of the capital stock of the Company.

32
<PAGE>

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of December 31, 1996 and as
adjusted to reflect the sale of Common Stock being offered by the Company
hereby, and the conversion of the outstanding shares of preferred stock for
(1) each person known by the Company to own beneficially 5% or more of the
Common Stock, (2) each director and executive officer of the Company and (3)
all directors and executive officers of the Company as a group. Except
pursuant to applicable community property laws and except as otherwise
indicated, each shareholder identified in the table possesses sole voting and
investment power with respect to its or his shares.

<TABLE>
<CAPTION>
PERCENTAGE OWNED
NUMBER OF ------------------------------
NAME SHARES BEFORE OFFERING AFTER OFFERING
---- --------- --------------- --------------
<S> <C> <C> <C>
Barry B. Conrad(1).................... 1,422,463 52.3% 38.2%
Floyd W. Collins(1)................... 1,422,463 52.3% 38.2%
Brian A. Harpster(2).................. 669,609 24.6% 18.0%
Richard J. Wiencek(3)................. 416,250 15.3 11.2
Bruce E. Fredriks..................... -0- -0- -0-
Robert D. Kopitke(4).................. 124,875 4.6 3.4
All directors, nominees for director
and executive officers as a group
(six individuals).................... 2,633,197 96.8% 70.8%
</TABLE>
- --------
(1) Includes 1,339,213 shares owned of record by Conrad/Collins Merchant
Banking Fund Ltd., a Texas limited partnership ("MBF") of which MBG is the
general partner. The general partner of MBG is Conrad Collins, Inc., a
Texas corporation, of which Messrs. Conrad and Collins are the sole
directors and shareholders. Also includes 83,250 shares owned by MBG. The
address of Messrs. Conrad and Collins is 700 N. Pearl, Suite 1910, Dallas,
Texas 75201.
(2) Consists of 669,609 shares held by Holly Investments, L.P., of which Mr.
Harpster's spouse is the beneficial owner. Mr. Harpster's address is 1324
E. Grand Avenue, Ponca City, Oklahoma 74601.
(3) Mr. Wiencek's address is 4647 Bronze Way, Dallas, Texas 75236.
(4) Includes 41,625 shares held by The Gensal Group, Inc., of which Mr.
Kopitke is the principal shareholder, and 83,250 shares owned by Mr.
Kopitke directly.

33
<PAGE>

DESCRIPTION OF CAPITAL STOCK

WebWorld's authorized capital stock consists of 20,000,000 shares of Common
Stock, $.01 par value, and 2,000,000 shares of preferred stock, $1.00 par
value per share ("Preferred Stock").

The following description of the Company's capital stock does not purport to
be complete and is subject in all respects to applicable Texas law and to the
provisions of the Company's Articles of Incorporation and By-laws, as amended
to date.

COMMON STOCK

The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of shareholders, including the election of
directors. The Common Stock does not have cumulative voting rights, which
means that the holders of a majority of the shares voting for election of
directors can elect all members of the Board of Directors. Dividends may be
paid ratably to holders of Common Stock when and if declared by the Board of
Directors out of funds legally available therefor. Upon liquidation or
dissolution of the Company, the holders of Common Stock will be entitled to
share ratably in the assets of the Company legally available for distribution
to shareholders after payment of all liabilities and the liquidation
preferences of any outstanding Preferred Stock.

The holders of Common Stock have no preemptive or conversion rights or other
subscription rights and are not subject to redemption or sinking fund
provisions or to calls or assessments by the Company. The shares of Common
Stock offered hereby will be, when issued and paid for, fully paid and not
liable for call or assessment. The Common Stock is listed for trading on the
Boston Stock Exchange and Nasdaq SmallCap Market.

As of March 1, 1997, there were nine holders of record of Common Stock.

PREFERRED STOCK

The Company may issue Preferred Stock in one or more series and the Board of
Directors may designate the dividend rate, voting rights and other rights,
preferences and restrictions of each series. It is not possible to share the
actual effect of the issuance of any shares of Preferred Stock upon the rights
of holders of the Common Stock until the Board of Directors determines the
specific rights of the holders of such Preferred Stock. However, the effects
might include, among other things, restricting dividends on the Common Stock,
diluting the voting power of the Common Stock, impairing the liquidation
rights of the Common Stock and delaying or preventing a change in control of
the Company without further action by the shareholders. The Company presently
has no plans to issue any shares of Preferred Stock.

The Company previously issued an aggregate of 935,000 shares of preferred
stock in three different series. The holders of these shares agreed with the
Company to convert such shares into an aggregate of 2,008,823 shares of Common
Stock on the effective date of this Offering. Unless the context otherwise
indicates, all of the historical financial statements and other financial
information set forth herein gives effect to such conversion into Common
Stock. See Note 10 of Notes to Financial Statements.

WARRANTS

The Warrants will be issued in registered form pursuant to an agreement
dated the date of this Prospectus (the "Warrant Agreement"), between the
Company and American Stock Transfer & Trust Company, as the Warrant Agent (the
"Warrant Agent"). The following discussion of certain terms and provisions of
the Warrants is qualified in its entirety by reference to the Warrant
Agreement. A form of the certificate representing the Warrants which form a
part of the Warrant Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.

Each of the Warrants entitles the registered holder to purchase one share of
Common Stock. The Warrants are exercisable at a price equal to $6.88 (which
exercise price has been arbitrarily determined by the Company and the
Representatives) subject to certain adjustments. The Warrants are entitled to
the benefit of adjustments in their exercise prices and in the number of
shares of Common Stock or other securities deliverable upon the exercise
thereof in the event of a stock dividend, stock split, reclassification,
reorganization, consolidation or merger.

34
<PAGE>

The Warrants may be exercised at any time and continuing thereafter until
the close of five years from the date hereof, unless such period is extended
by the Company. After the expiration date, Warrant holders shall have no
further rights. Warrants may be exercised by surrendering the certificate
evidencing such Warrant, with the form of election to purchase on the reverse
side of such certificate properly completed and executed, together with
payment of the exercise price and any transfer tax, to the Warrant Agent. If
less than all of the Warrants evidenced by a warrant certificate are
exercised, a new certificate will be issued for the remaining number of
Warrants. Payment of the exercise price may be made by cash, bank draft or
official bank or certified check equal to the exercise price.

Warrant holders do not have any voting or any other rights as shareholders
of the Company. The Company has the right to redeem the Warrants, at a price
of $.05 per Warrant, by written notice to the registered holders thereof,
mailed not less than 30 nor more than 60 days prior to the redemption date;
provided, however, any redemption of the Warrants prior to May 20, 1998 will
require the written consent of the Representatives. The Company may exercise
this right only if the closing bid price for the Common Stock for seven
trading days during a 10 consecutive trading day period ending no more than 15
days prior to the date that the notice of redemption is given, equals or
exceeds $11.00 per share, subject to adjustment. If the Company exercises its
right to call Warrants for redemption, such Warrants may still be exercised
until the close of business on the day immediately preceding the redemption
date. If any Warrant called for redemption is not exercised by such time, it
will cease to be exercisable, and the holder thereof will be entitled only to
the repurchase price. Notice of redemption will be mailed to all holders of
Warrants of record at least 30 days, but not more than 60 days, before the
redemption date. The foregoing notwithstanding, the Company may not call the
Warrants at any time that a current registration statement under the Act is
not then in effect. Any redemption of the Warrants during the one-year period
commencing on the date of this Prospectus shall require the written consent of
the Representatives.

The Warrant Agreement permits the Company and the Warrant Agent without the
consent of Warrant holders, to supplement or amend the Warrant Agreement in
order to cure any ambiguity, manifest error or other mistake, or to address
other matters or questions arising thereafter that the Company and the Warrant
Agent deem necessary or desirable and that do not adversely affect the
interest of any Warrant holder. The Company and the Warrant Agent may also
supplement or amend the Warrant Agreement in any other respect with the
written consent of holders of not less than a majority in the number of the
Warrants then outstanding; however, no such supplement or amendment may (i)
make any modification of the terms upon which the Warrants are exercisable or
may be redeemed; or (ii) reduce the percentage interest of the holders of the
Warrants without the consent of each Warrant holder affected thereby.

In order for the holder to exercise a Warrant, there must be an effective
registration statement, with a current prospectus on file with the Commission
covering the shares of Common Stock underlying the Warrants, and the issuance
of such shares to the holder must be registered, qualified or exempt under the
laws of the state in which the holder resides. If required, the Company will
file a new registration statement with the Commission with respect to the
securities underlying the Warrants prior to the exercise of such Warrants and
will deliver a prospectus with respect to such securities to all holders
thereof as required by Section 10(a)(3) of the Act. See "Risk Factors--
Necessity to Maintain Current Prospectus" and "State Blue Sky Registration
Required to Exercise Warrants."

At the closing of this Offering, the Company will issue to the
Representatives or their designees, for nominal consideration,
Representative's Warrants to purchase up to 100,000 Shares and 100,000
Underlying Warrants. The Representatives' Warrants will be exercisable for a
four-year period commencing one year from the effective date of this Offering
at an exercise price of 120% of the price at which the Common Stock and
Warrants are sold to the public, subject to adjustment. The Representative's
Warrants will not be transferable, except (i) to officers of the
Representative, other Underwriters, and officers and partners thereof; (ii) by
will; or (iii) by operation of law.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Company's Common Stock is American
Stock Transfer & Trust Company, New York, New York.

35
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

The Company has outstanding 2,719,778 shares of Common Stock. In addition,
the Company has 350,000 shares reserved for issuance upon exercise of options
granted under the Company's Stock Option Plan, none of which are immediately
exercisable. Of the 3,719,778 shares to be outstanding after the Offering, the
1,000,000 shares sold to the public hereby will be freely tradeable without
restrictions or registration under the Act, except that any shares purchased
by "affiliates" of the Company, as that term is defined in Rule 144 ("Rule
144") under the Act ("Affiliates"), may generally only be sold to clients
within the limitations of Rule 144 described below. An aggregate of 1,000,000
shares will be issued upon the exercise of the Warrants. The Company has
agreed to register these shares under the Act in order to permit the resale of
such shares in the open market from time to time and has agreed to maintain
the effectiveness of such registration for one year. Following the sale of
such shares pursuant to an effective registration statement filed in
connection with such registration, these shares shall be freely tradeable. The
remaining 2,719,778 shares were issued and sold by the Company in private
transactions in reliance upon exemptions from registration under the Act and
are, therefore deemed "restricted securities" under Rule 144 which may not be
sold publicly unless the shares are registered under the Act or are sold under
Rule 144. Under Rule 144, substantially all of the remaining restricted
securities would become eligible for resale 90 days after the date the Company
becomes subject to the reporting requirements of the Exchange Act, although
2,633,197 of such shares are subject to contractual resale restrictions.

The Company, the Company's executive officers and directors, and
shareholders of the Company that own in the aggregate 96% of the Common Stock
outstanding prior to the Offering have agreed not to offer, sell, contract to
sell or otherwise dispose of any shares of Common Stock or any securities
exercisable for or convertible into Common Stock for a period of one year
after the date of this Prospectus without the prior written consent of the
Representative.

In general, under Rule 144 a person (or persons whose sales are aggregated)
who beneficially owns restricted securities for one year or any other shares
not contemplated as restrictive securities without regard to such one-year
holding period, is entitled to sell within any three-month period a number of
shares that does not exceed the greater of 1% of the then outstanding shares
of the Company's Common Stock or the average weekly trading volume in the
Company's Common Stock during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain manner-of-sale provisions,
notice requirements and the availability of current public information about
the Company. A person who has not been an affiliate of the Company at any time
during the three months preceding a sale, and who beneficially owns shares
last acquired from the Company or an affiliate of the Company at least two
years previously, is entitled to sell all such shares under Rule 144 without
regard to any of the limitations of the Rule.

REGISTRATION RIGHTS
Upon the expiration of the contractual one-year lock-up period described
above, certain shares issued or issuable upon the exercise of options granted
prior to the date of this Prospectus also may be issuable for sale in the
public market pursuant to Rule 701 under the Securities Act. In general, Rule
701 permits resales of shares issued pursuant to certain compensatory benefit
plans and contracts commencing at the end of the 90 day period after the
Company becomes subject to the reporting requirements of the Exchange Act. If
all of the requirements of Rule 701 are satisfied, and upon completion of the
one-year period, 416,250 shares of Common Stock issued in 1996 upon exercise
of previously granted options will be eligible for sale, subject to the
repayment of notes issued for the payment of the exercise price.

The Company intends to file a registration statement under the Securities
Act to register all shares of Common Stock issuable pursuant to the Company's
Stock Option Plan. See "Management--Stock Option Plan." Subject to the
completion of the one-year period described above, shares of Common Stock
issued after the effective date of such registration statement upon the
exercise of awards issued under such plan generally will be eligible for sale
in the public market.

The Company cannot predict the effect, if any, that sales of restricted
securities or the availability of such securities for sale could have on the
market price, if any, prevailing from time to time. Nevertheless, sales of
substantial amounts of the Company's securities, including the securities
offered hereby, could adversely affect prevailing market prices of the
Company's securities and the Company's ability to raise additional capital by
occurring at a time when it would be beneficial for the Company to sell
securities.

36
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below, for whom First London Securities Corporation and RAS
Securities Corp. are acting as the Representatives, have severally agreed to
purchase from the Company an aggregate of 1,000,000 shares of Common Stock and
1,000,000 Warrants. The number of shares of Common Stock and Warrants which
each Underwriter has agreed to purchase is set forth opposite its name.

<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
NAME SHARES WARRANTS
---- --------- ---------
<S> <C> <C>
First London Securities Corporation..................... 590,000 590,000
RAS Securities Corp..................................... 250,000 250,000
First Colonial Securities Group, Inc. .................. 160,000 160,000
--------- ---------
Total................................................. 1,000,000 1,000,000
========= =========
</TABLE>

The Securities are offered by the Underwriters subject to prior sale, when,
as and if delivered to and accepted by the Underwriters and subject to
approval of certain legal matters by counsel and certain other conditions. The
Underwriters are committed to purchase all Securities offered by this
Prospectus, if any are purchased.

The Company has been advised by the Representatives that the Underwriters
propose initially to offer the Securities offered hereby to the public at the
offering price set forth on the cover page of this Prospectus. The
Representatives have advised the Company that the Underwriters propose to
offer the Securities through members of the NASD, and may allow a concession,
in their discretion, to certain dealers who are members of the NASD and who
agree to sell the Securities in conformity with the NASD Conduct Rules. Such
concessions shall not exceed the amount of the underwriting discount that the
Underwriters are to receive.

The Company has granted to the Representatives an option, exercisable for 30
days from the date of this Prospectus, to purchase up to an additional 150,000
shares of Common Stock and an additional 150,000 Warrants at the public
offering price less the underwriting discount set forth on the cover page of
this Prospectus (the "Over-Allotment Option"). The Representatives may
exercise the Over-Allotment Option solely to cover over-allotments in the sale
of the Securities being offered by this Prospectus.

Officers and directors of the Company may introduce the Representatives to
persons to consider the Offering and purchase Securities either through the
Representatives, other Underwriters, or through participating dealers. In this
connection, officers and directors will not receive any commissions or any
other compensation.

The Company has agreed to pay the Representatives a commission of 10% of the
gross proceeds of the offering (the "Underwriting Discount"), including the
gross proceeds from the sale of the Over-Allotment Option, if exercised. In
addition, the Company has agreed to pay to the Representatives a non-
accountable expense allowance of two percent (2%) of the gross proceeds of
this Offering, including proceeds from any Securities purchased pursuant to
the Over-Allotment Option. The Representatives' expenses in excess of the non-
accountable expense allowance will be paid by the Representatives. To the
extent that the expenses of the Representatives are less than the amount of
the non-accountable expense allowance received, such excess shall be deemed to
be additional compensation to the Representatives. The Company has also agreed
to pay the Representatives upon the exercise or redemption of the Warrants a
fee equal to 5% of the gross proceeds received by the Company from the
exercise of the Warrants and 5% of the aggregate redemption price for the
Warrants redeemed. Such fee will be paid to the Representatives or their
designees no sooner than twelve months after the effective date of this
Offering. Additionally, the Representatives or their designees must be
designated in writing by the Warrant holders as having solicited the Warrant
in order to receive the fee. Additionally, First London Securities Corporation
shall have the right to nominate an Advisory Director to the Company's Board
of

37
<PAGE>

Directors. The Advisory Director will have the same privileges as a normal
director, including equal compensation, but will forfeit the right to vote on
Board issues. The Representatives have informed the Company that they do not
expect sales to discretionary accounts to exceed 5% of the total number of
Securities offered by the Company hereby.

Prior to this Offering, there has been no public market for the Common Stock
or Warrants of the Company. Consequently, the initial public offering price
for the Securities, and the terms of the Warrants (including the exercise
price of the Warrants), have been determined by negotiation between the
Company and the Representatives. Among the factors considered in determining
the public offering price were the history of, and the prospect for, the
Company's business, an assessment of the Company's management, its past and
present operations, the Company's development and the general condition of the
securities market at the time of this Offering. The initial public offering
price does not necessarily bear any relationship to the Company's assets, book
value, earnings or other established criteria of value. Such price is subject
to change as a result of market conditions and other factors, and no assurance
can be given that a public market for the Common Stock or Warrants will
develop after the close of this Offering, or if a public market in fact
develops, that such public market will be sustained, or that the Common Stock
or Warrants can be resold at any time at the offering or any other price. See
"Risk Factors."

At the closing of this Offering, the Company will issue to the
Representatives or their designees, for nominal consideration,
Representatives' Warrants to purchase up to 100,000 shares of Common Stock
(the "Shares") and 100,000 Underlying Warrants. The Representatives' Warrants
will be exercisable for a four-year period commencing one year from the
effective date of this Offering at an exercise price of 120% of the price at
which the Common Stock and Warrants are sold to the public, subject to
adjustment. The Representatives' Warrants will not be transferable, except (i)
to officers of the Representatives, other Underwriters, and officers and
partners thereof; (ii) by will; or (iii) by operation of law.

The Representatives' Warrant contains provisions providing for appropriate
adjustment in the event of any merger, consolidation, recapitalization,
reclassification, stock dividend, stock split or similar transaction. The
Representatives' Warrant contain net issuance provisions permitting the
holders thereof to elect to exercise the Representatives' Warrant in whole or
in part and instruct the Company to withhold from the securities issuable upon
exercise, a number of securities, valued at the current fair market value on
the date of exercise, to pay the exercise price. Such net exercise provision
has the effect of requiring the Company to issue shares of Common Stock
without a corresponding increase in capital. A net exercise of the
Representatives' Warrant will have the same dilutive effect on the interests
of the Company's shareholders as will a cash exercise. The Representatives'
Warrant does not entitle the holders thereof to any rights as a shareholder of
the Company until such Representatives' Warrant is exercised and shares of
Common Stock are purchased thereunder.

The Company has granted to the holders of the Representatives' Warrants
certain rights with respect to registration of the Shares, the Underlying
Warrants and the Common Stock issuable upon exercise of the Representatives'
Warrants (the "Registrable Securities") under the Securities Act. For a period
of four years commencing one year following the date of this Prospectus, the
holders representing more than 50% of the Registrable Securities may require
the Company at the Company's sole expense to prepare and file one registration
statement under the Securities Act with respect to the Registrable Securities.
For a period of four years commencing one year following the date of this
Prospectus, the holders representing more than 50% of the Registrable
Securities also have the right at the Representatives' or holders' expense to
require the Company to prepare and file one registration statement with
respect to the Registrable Securities. In addition, subject to certain
limitations, in the event the Company proposes to register any of its
securities under the Securities Act during the seven year period following the
date of this Prospectus, the holders of the Registrable Securities are
entitled to notice of such registration and may elect to include the
Registrable Securities held by them in such registration statement at the sole
expense of the Company.

The Company has agreed to indemnify the Underwriters against any costs or
liabilities incurred by the Underwriters by reasons of misstatements or
omissions to state material facts in connection with the statements

38
<PAGE>

made in the Registration Statement and the Prospectus. The Underwriters have
in turn agreed to indemnify the Company against any liabilities by reason of
misstatements or omissions to state material facts in connection with the
statements made in the Prospectus, based on information relating to the
Underwriters and furnished in writing by the Underwriters. To the extent that
this section may purport to provide exculpation from possible liabilities
arising from the federal securities laws, in the opinion of the Commission,
such indemnification is contrary to public policy and therefore unenforceable.

The foregoing is a summary of the principal terms of the agreements
described above and does not purport to be complete. Reference is made to
copies of each such agreement which are filed as exhibits to the Registration
Statement. See "Available Information."

LEGAL MATTERS

Legal matters in connection with the Common Stock and Warrants being offered
hereby will be passed upon for the Company by Crouch & Hallett, L.L.P.,
Dallas, Texas. Certain legal matters will be passed upon for the Underwriters
by Jackson Walker, L.L.P., Dallas, Texas.

EXPERTS

The financial statements of the Company as of March 31, 1996, and December
31, 1996, and for each of the two years in the period ended March 31, 1996,
and for the nine months ended December 31, 1996, included in this Prospectus
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report appearing herein, and have been so included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.

39
<PAGE>

NEI WEBWORLD, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INDEPENDENT AUDITORS' REPORT.............................................. F-2
FINANCIAL STATEMENTS AND NOTES:
Balance Sheets as of March 31, 1996, and December 31, 1996 ............... F-3
Statements of Operations for the Years Ended March 31, 1995 and 1996, and
for the Nine Months Ended December 31, 1995 (unaudited) and 1996 ........ F-4
Statements of Shareholders' Equity for the Years Ended March 31, 1995 and
1996, and for the Nine Months Ended December 31, 1996 ................... F-5
Statements of Cash Flows for the Years Ended March 31, 1995 and 1996, and
for the Nine Months Ended December 31, 1995 (unaudited) and 1996 ........ F-6
Notes to Financial Statements............................................. F-7
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Directors and Shareholders of NEI WebWorld, Inc.:

We have audited the accompanying balance sheets of NEI WebWorld, Inc. as of
March 31, 1996, and December 31, 1996, and the related statements of
operations, shareholders' equity and cash flows for each of the two years in
the period ended March 31, 1996, and for the nine months ended December 31,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of NEI WebWorld, Inc. as of March 31, 1996,
and December 31, 1996, and the results of its operations and its cash flows
for each of the two years in the period ended March 31, 1996, and for the nine
months ended December 31, 1996, in conformity with generally accepted
accounting principles.

/s/ Deloitte & Touche LLP
Deloitte & Touche LLP

Dallas, Texas
April 11, 1997

F-2
<PAGE>

NEI WEBWORLD, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1996
---------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash................................................ $ 500 $ 500
Accounts receivable--net (Notes 3 and 7)............ 1,718,046 2,723,738
Inventories (Note 7)................................ 607,538 929,235
Prepaid expenses and other.......................... 20,145 443
Deferred income tax benefits (Note 9)............... 13,292 --
Deferred costs on insurance claims in process (Note
6)................................................. 290,172 --
---------- ----------
Total current assets.............................. 2,649,693 3,653,916
PROPERTY, PLANT AND EQUIPMENT--Net (Notes 4 and 7).... 2,870,215 4,573,785
INTANGIBLES AND OTHER ASSETS--Net (Note 5)............ 657,951 540,532
DEFERRED INCOME TAX BENEFITS (Note 9)................. 42,024 37,000
---------- ----------
TOTAL............................................. $6,219,883 $8,805,233
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable (Note 7)............................... $ 950,000 $1,461,831
Current portion of long-term debt (Note 7).......... 689,904 664,286
Accounts payable.................................... 706,156 1,578,365
Accrued expenses and other liabilities.............. 129,613 251,695
Accrued management and consulting fees (Note 13).... 32,500 82,500
Accrued equipment installation costs (Note 2)....... -- 580,000
Income taxes payable (Note 9)....................... -- 45,526
---------- ----------
Total current liabilities......................... 2,508,173 4,664,203
LONG-TERM DEBT--Less current portion (Note 7)......... 3,020,027 3,395,714
COMMITMENTS (Note 8)
SHAREHOLDERS' EQUITY (Notes 10 and 11):
Common stock put warrants for 90,000 shares, at
estimated redemption value......................... 50,000 --
Common stock: 20,000,000 shares of $.01 par value
authorized; 2,203,628 shares and 2,719,778 shares
issued and outstanding, respectively............... 22,036 27,198
Additional paid-in capital.......................... 853,849 1,033,687
Accumulated deficit................................. (234,202) (190,569)
Notes receivable--shareholders...................... -- (125,000)
---------- ----------
Total shareholders' equity........................ 691,683 745,316
---------- ----------
TOTAL............................................. $6,219,883 $8,805,233
========== ==========
</TABLE>

See notes to financial statements.

F-3
<PAGE>

NEI WEBWORLD, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED MARCH 31, DECEMBER 31,
------------------------ ------------------------
1995 1996 1995 1996
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET SALES (Note 3)........ $12,005,532 $14,285,858 $11,039,603 $12,820,032
COST OF SALES............. 9,775,507 12,239,998 9,416,389 10,611,446
----------- ----------- ----------- -----------
GROSS PROFIT.............. 2,230,025 2,045,860 1,623,214 2,208,586
OPERATING EXPENSES:
Selling, general and
administrative (Note
12).................... 912,390 1,164,963 923,931 1,166,539
Depreciation--property.. 378,151 410,702 305,926 378,899
Amortization--
intangibles............ 232,624 232,485 174,430 174,163
Management and
consulting fees (Note
13).................... 140,250 157,408 152,950 138,499
----------- ----------- ----------- -----------
Total................. 1,663,415 1,965,558 1,557,237 1,858,100
----------- ----------- ----------- -----------
OPERATING INCOME.......... 566,610 80,302 65,977 350,486
OTHER INCOME (EXPENSE):
Interest expense (Note
7)..................... (420,856) (445,154) (335,052) (374,986)
Other................... 3,943 25,776 23,932 19,413
Gain on fire insurance
settlement (Note 6).... -- -- -- 271,265
----------- ----------- ----------- -----------
Total................. (416,913) (419,378) (311,120) (84,308)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
INCOME TAX EXPENSE AND
EXTRAORDINARY ITEM....... 149,697 (339,076) (245,143) 266,178
INCOME TAX (BENEFIT)
EXPENSE (Note 9)......... 47,823 (29,019) (21,764) 90,000
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM....... 101,874 (310,057) (223,379) 176,178
EXTRAORDINARY ITEM--Loss
on debt retirement (net
of income tax benefit of
$36,000) (Note 7)........ -- -- -- (72,545)
----------- ----------- ----------- -----------
NET INCOME (LOSS)......... $ 101,874 $ (310,057) $ (223,379) $ 103,633
=========== =========== =========== ===========
PRO FORMA EARNINGS PER
SHARE:
Income (loss) before
extraordinary item..... $ (0.11) $ (0.08) $ 0.06
=========== =========== ===========
Net income (loss)....... $ (0.11) $ (0.08) $ 0.04
=========== =========== ===========
PRO FORMA COMMON SHARES
OUTSTANDING.............. 2,719,778 2,719,778 2,719,778
=========== =========== ===========
</TABLE>

See notes to financial statements.

F-4
<PAGE>

NEI WEBWORLD, INC.

STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON COMMON STOCK ADDITIONAL NOTES TOTAL
STOCK PUT ----------------- PAID-IN ACCUMULATED RECEIVABLE- SHAREHOLDERS'
WARRANTS SHARES AMOUNT CAPITAL DEFICIT SHAREHOLDERS EQUITY
--------- --------- ------- ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES AT APRIL 1,
1994................... $ 50,000 2,003,828 $20,038 $ 823,462 $ 6,366 $ -- $ 899,866
Accretion on preferred
stock previously
outstanding (Note
10).................. -- 99,900 999 101,027 (102,026) -- --
Accretion for
estimated redemption
value of common stock
put warrants for
90,000 shares........ 159,124 -- -- -- (159,124) -- --
Net income............ -- -- -- -- 101,874 -- 101,874
-------- --------- ------- ---------- --------- --------- ---------
BALANCES AT MARCH 31,
1995................... 209,124 2,103,728 21,037 924,489 (152,910) -- 1,001,740
Accretion on preferred
stock previously
outstanding (Note
10).................. -- 99,900 999 (70,640) 69,641 -- --
Accretion (decrease)
for estimated
redemption value of
the common stock put
warrants............. (159,124) -- -- -- 159,124 -- --
Net loss.............. -- -- -- -- (310,057) -- (310,057)
-------- --------- ------- ---------- --------- --------- ---------
BALANCES AT MARCH 31,
1996................... 50,000 2,203,628 22,036 853,849 (234,202) -- 691,683
Accretion on preferred
stock previously
outstanding (Note
10).................. -- 99,900 999 59,001 (60,000) -- --
Issuance of common
stock warrants for
80,000 shares........ 23,500 -- -- -- (23,500) -- --
Redemption of common
stock warrants for
170,000 shares....... (73,500) -- -- -- 23,500 -- (50,000)
Exercise of stock
options.............. -- 416,250 4,163 120,837 -- (125,000) --
Net income............ -- -- -- -- 103,633 -- 103,633
-------- --------- ------- ---------- --------- --------- ---------
BALANCES AT DECEMBER 31,
1996................... $ -- 2,719,778 $27,198 $1,033,687 $(190,569) $(125,000) $ 745,316
======== ========= ======= ========== ========= ========= =========
</TABLE>

See notes to financial statements.

F-5
<PAGE>

NEI WEBWORLD, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED MARCH 31, DECEMBER 31,
---------------------- -----------------------
1995 1996 1995 1996
---------- ---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)........... $ 101,874 $ (310,057) $(223,379) $ 103,633
Extraordinary loss on debt
retirement................. -- -- -- 108,545
Gain on fire insurance
settlement (Note 6)........ -- -- -- (271,265)
Noncash items in net income:
Depreciation and
amortization............. 610,775 643,187 473,294 544,964
Amortization of debt
discount................. 8,956 9,510 7,062 8,098
Gain on retirement of
asset.................... -- (17,032) -- --
Deferred income taxes..... (37,083) (18,233) (13,675) 18,316
Cash from (used for)
operating working capital:
Accounts receivable....... (442,699) (272,919) (402,855) (509,828)
Inventories............... (523,761) 333,659 (163,359) 231,241
Prepaid expenses and
other.................... 2,850 17,928 (7,030) 19,702
Costs related to insurance
claims settlements (Note
6)....................... -- (127,741) -- (83,227)
Accounts payable and
accrued liabilities...... 158,235 (179,315) 226,628 215,490
Income taxes payable...... 47,542 (47,542) (46,906) 45,526
---------- ---------- --------- -----------
Net cash provided by
(used for) operating
activities............. (73,311) 31,445 (150,220) 431,195
---------- ---------- --------- -----------
INVESTING ACTIVITIES:
Acquisition of assets (Note
2)......................... (217,063)
Additions to property, plant
and equipment.............. (193,079) (266,420) (198,382) (429,707)
Proceeds from insurance
settlements (Note 6)....... 61,853 21,824 -- 578,965
Increase in intangibles and
other assets............... (20,201) -- -- (90,079)
---------- ---------- --------- -----------
Net cash used for
investing activities..... (151,427) (244,596) (198,382) (157,884)
---------- ---------- --------- -----------
FINANCING ACTIVITIES:
Borrowings on notes payable
and long-term debt......... 400,000 550,000 850,000 4,711,831
Payments/retirement of notes
payable and long-term
debt....................... (553,808) (636,849) (460,470) (4,935,142)
Borrowings under capital
lease arrangements......... -- 300,000 -- --
Redemption of warrants...... -- -- -- (50,000)
---------- ---------- --------- -----------
Net cash provided by (used
for) financing
activities............... (153,808) 213,151 389,530 (273,311)
---------- ---------- --------- -----------
INCREASE (DECREASE) IN CASH... (378,546) -- 40,928 --
CASH:
Beginning of period......... 379,046 500 500 500
---------- ---------- --------- -----------
End of period............... $ 500 $ 500 $ 41,428 $ 500
========== ========== ========= ===========
SUPPLEMENTAL INFORMATION:
Interest paid............... $ 436,075 $ 445,806 $ 327,990 $ 366,573
========== ========== ========= ===========
Income taxes paid
(received)................. $ 40,000 $ 47,000 $ 47,000 $ (9,842)
========== ========== ========= ===========
Noncash investing and
financing activities:
Acquisition of assets for
long-term debt (Note 2).. $ 1,010,000
===========
Exercise of stock options
for notes receivable
(Note 11)................ $ 125,000
===========
</TABLE>

See notes to financial statements.

F-6
<PAGE>

NEI WEBWORLD, INC.

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED MARCH 31, 1995 AND 1996,
AND NINE MONTHS ENDED DECEMBER 31, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business--NEI WebWorld, Inc. (the "Company") is in the business of printing
television programming schedules, advertising circulars, school catalogs and
other similar supplements for newspapers and periodicals. The Company
commenced operations in February 1994 following an acquisition accounted for
under the purchase method.

Preparation of Financial Statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingencies at the date of the financial statements and the
reported amounts of revenues and expenses for the period. Differences from
those estimates are recorded in the period they become known.

Revenues are recognized as sales primarily when print jobs are shipped.
Also, in accordance with trade practice, revenues are accrued for jobs in
process at year-end on the basis of production activity at pro rata billing
value of work completed.

Inventories, which consist primarily of paper, are stated at the lower of
cost (first-in, first-out method) or market.

Property, Plant and Equipment are stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are provided
using the straight-line method over the estimated useful lives of the assets
as follows: building and improvements--7 to 40 years, printing equipment and
other property--5 to 11 years.

Intangibles and Other Assets are amortized on a straight-line basis over
five years.

Financial Instruments consist of cash, receivables, payables and debt, the
carrying values of which are a reasonable estimate of their fair values due to
their short maturities or current interest rates.

Deferred Income Taxes are provided under the asset and liability method for
temporary differences in the recognition of income and expense for tax and
financial reporting purposes.

Stock-Based Compensation arising from stock option grants is accounted for
by the intrinsic value method under APB Opinion No. 25. Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation," is
effective for the Company beginning April 1, 1996, although no options have
been granted since that date. This statement requires expanded disclosures of
stock-based compensation arrangements with employees and encourages (but does
not require) compensation cost to be measured based on the fair value of the
equity instrument awarded. As permitted by SFAS No. 123, the Company will
continue to apply APB Opinion No. 25 to its stock-based compensation awards to
employees and will disclose the required pro forma effect on net income and
earnings per share.

Pro Forma Earnings Per Share are computed based on the weighted average
number of common shares restated for the common stock split and the preferred
stock conversion discussed in Notes 10 and 11 outstanding in fiscal 1996 and
in the interim periods presented.

F-7
<PAGE>

NEI WEBWORLD, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

2. ASSET ACQUISITION

Effective September 13, 1996, the Company acquired certain printing
equipment and other assets and assumed certain liabilities from Webworks, Inc.
("Webworks"), a subsidiary of Morris Newspaper Corporation, for $50,000 cash,
a $1,010,000 note payable to the seller (Note 7) and $167,063 of acquisition
costs ($70,000 for brokerage and related acquisition services--see Note 13;
$58,000 for legal services; and $39,063 for consulting and related services)
primarily paid in cash. This total purchase price of $1,227,063 was allocated
to the assets acquired and liabilities assumed in proportion to their fair
values as shown below:

<TABLE>
<S> <C>
Current assets acquired--primarily receivables and
inventories................................................ $1,048,802
Current liabilities assumed................................. (828,802)
Accrued equipment installation costs........................ (580,000)
----------
Net current liabilities..................................... (360,000)
Web presses and other printing equipment acquired........... 1,587,063
----------
$1,227,063
==========
</TABLE>

The acquired printing equipment is located in a facility leased under a
short-term operating lease. The estimated costs for the Company to relocate
and install the equipment in its facilities have been accrued, based on the
installation plan initiated at acquisition. The installation commenced in
March 1997 and is expected to be completed in September 1997.

3. ACCOUNTS RECEIVABLE AND SIGNIFICANT CUSTOMERS

Accounts receivable consist of the following:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1996
---------- ------------
<S> <C> <C>
Trade:
Billed........................................... $1,616,545 $2,694,549
Accrued revenues on jobs in process.............. 43,209 84,854
Other accounts receivable.......................... 60,644 16,686
---------- ----------
1,720,398 2,796,089
Less allowance for doubtful accounts............... 2,352 72,351
---------- ----------
Accounts receivable--net........................... $1,718,046 $2,723,738
========== ==========
</TABLE>

Revenues and accounts receivable from significant customers represent the
following percentages of the Company's net sales and accounts receivable:

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31, NINE MONTHS ENDED DECEMBER 31,
----------------------------------------- -----------------------------------------
1995 1996 1995 (UNAUDITED) 1996
-------------------- -------------------- -------------------- --------------------
ACCOUNTS ACCOUNTS ACCOUNTS ACCOUNTS
NET SALES RECEIVABLE NET SALES RECEIVABLE NET SALES RECEIVABLE NET SALES RECEIVABLE
--------- ---------- --------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Customer A.............. 56% 48% 55% 36% 53% 39% 36% 18%
Customer B.............. 16% 7% 6% 1% 6% 1% 1% 1%
Customer C.............. -- -- 6% 14% 5% 11% 10% 7%
Customer D.............. 4% 6% 5% 9% 5% 17% 7% 7%
</TABLE>

F-8
<PAGE>

NEI WEBWORLD, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1996
---------- ------------
<S> <C> <C>
Land.............................................. $ 186,264 $ 186,264
Building and improvements......................... 863,830 1,181,156
Printing equipment and other property............. 2,611,376 4,374,719
Furniture and fixtures............................ 27,909 29,709
Automotive and office equipment................... 8,000 8,000
---------- ----------
3,697,379 5,779,848
Less accumulated depreciation and amortization.... 827,164 1,206,063
---------- ----------
Property, plant and equipment--net................ $2,870,215 $4,573,785
========== ==========
</TABLE>

5. INTANGIBLES AND OTHER ASSETS

Intangibles and other assets consist of the following:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1996
---------- ------------
<S> <C> <C>
Noncompete agreement (with prior owner of the
Company; five-year term from February 1994--see
Notes 1 and 7)................................... $ 750,000 $ 750,000
Goodwill.......................................... 305,533 305,533
Debt issuance costs............................... 80,322 90,079
Organizational costs.............................. 25,235 25,235
---------- ----------
1,161,090 1,170,847
Less accumulated amortization..................... 503,139 630,315
---------- ----------
Intangibles and other assets--net................. $ 657,951 $ 540,532
========== ==========
</TABLE>

6. FIRE INSURANCE CLAIMS

On March 6, 1996, a fire damaged a portion of the Company's facilities.
Related to this fire, the Company deferred costs totaling $290,172, consisting
primarily of $162,431 for the net book value of property identified as damaged
by the fire, $62,042 for cleanup costs and $65,699 for restoration and
enhancement costs incurred through March 31, 1996. The Company continued to
incur cleanup and restoration costs after March 31, 1996, and was in the
process of finalizing its claim with an insurance company at that date.

In the nine months ended December 31, 1996, the Company incurred additional
cleanup costs of $83,227, received insurance proceeds of $578,965 and recorded
a gain of $271,265. Also, total restoration and enhancement costs of $395,903
were recorded as additions to buildings and improvements and to equipment.

F-9
<PAGE>

NEI WEBWORLD, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

7. NOTES PAYABLE, CREDIT FACILITIES AND CAPITALIZED LEASE OBLIGATIONS

Long-term debt consists of the following:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1996
---------- ------------
<S> <C> <C>
Notes payable to lender under term loans, due in
monthly principal installments of $38,690, plus in-
terest at lender's prime rate (8% at December 31,
1996), plus 1.5%, balance due December 31, 1998, col-
lateralized by substantially all Company assets...... $ -- $3,250,000
Subordinated note payable to Webworks, interest at 12%
payable quarterly, plus principal installments of
$100,000 on September 12, 1997 and 1998, and $310,000
on September 12, 1999, collateralized by certain
property............................................. -- 510,000
Subordinated note payable to prior owner, due in an-
nual principal installments of $100,000, plus inter-
est at 8% payable quarterly, through February 28,
1999................................................. 300,000 300,000
Note payable to bank under term loan, due in monthly
installments of $9,320, including interest at 8.64%,
balance due March 31, 1999, collateralized by sub-
stantially all Company assets........................ 859,660 --
Subordinated notes payable to lender (net of $31,434
unamortized discount assigned to common stock war-
rant), interest at 12% payable quarterly, plus prin-
cipal installments of $62,500 per quarter beginning
June 30, 1997 through March 31, 2000, collateralized
by substantially all Company assets.................. 718,566 --
Capital lease obligations, due in monthly installments
of $58,660, including interest at 8.6% to 10.9%
through December 31, 2000, collateralized by the
leased equipment. Future minimum lease payments total
$2,100,431, which includes interest of $268,726...... 1,831,705 --
---------- ----------
3,709,931 4,060,000
Less current portion.................................. 689,904 664,286
---------- ----------
Long-term debt--less current portion.................. $3,020,027 $3,395,714
========== ==========
</TABLE>

Notes payable of $1,461,831 at December 31, 1996, are outstanding under a
$3,750,000 revolving loan agreement as of that date which matures December 31,
1998, and is subject to annual renewals thereafter. Borrowings under the
revolving loan are subject to borrowing base requirements which may be
adjusted at the lender's discretion, bear interest payable monthly at lender's
prime rate plus 1.25%, and are collateralized by a lockbox requirement and by
substantially all Company assets. The revolving loan carries a .25% annual
commitment fee, payable quarterly, on the unused portion of the loan.

The loan agreement and notes payable to lender under the revolving loan and
term loans require maintenance of specified levels of adjusted net worth and
limit additional debt, investing activities, payment of dividends, purchases
of Company stock, other changes in ownership and transactions with related
parties. The loan agreement carries a $1,000 monthly servicing fee and early
termination fees of $270,000 prior to December 31, 1997, $180,000 prior to
December 31, 1998, and $90,000 prior to the end of any renewal period.

The loan agreement also provides for capital expenditures loans of up to
$2,000,000, which would bear interest at the lender's prime rate, plus 1.5%,
would be payable monthly over five years or by the termination of the
agreement, and would be collateralized by substantially all Company assets. No
capital expenditures loans are outstanding at December 31, 1996.

F-10
<PAGE>

NEI WEBWORLD, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

In December 1996, a portion of the proceeds under these facilities were used
by the Company to retire the notes payable to the bank under the previous
revolving line of credit, the term loans and the subordinated notes payable
discussed below. In connection with this debt retirement, an extraordinary
loss of $108,545 (before tax benefits of $36,000) was recognized, including
write offs of the related debt issuance costs of $33,000 and unamortized debt
discount of $23,000.

Notes payable of $950,000 at March 31, 1996, were outstanding under a
$1,100,000 revolving bank line of credit which matures March 31, 1997 (as
revised on September 13, 1996). Borrowings under the line of credit were
subject to borrowing base requirements, bearing interest payable monthly at
the bank's base rate (8.25% at March 31, 1996) plus 1.5% and collateralized by
substantially all Company assets. The revolving line of credit carried a
commitment fee of .25% on the unused portion of the loan. These notes payable
were retired in December 1996.

On September 13, 1996, the subordinated lender and the Company amended the
subordinated loan agreement. The amended agreement provided for an accelerated
payment on the original loan of $50,000 payable on September 19, 1996, without
prepayment penalty. In addition, this lender received warrants to purchase
80,000 shares of the Company's stock for $1 a share, and granted the Company
the option to repay the loan in full by December 31, 1996, without any
prepayment penalties and repurchase the 1994 and 1996 warrants for $50,000.
This note payable was retired and the warrants were redeemed in December 1996.

Long-term debt under the agreements existing at December 31, 1996, matures
as follows:

<TABLE>
<S> <C>
Fiscal year ending March 31:
1997......................................................... $ 216,071
1998 (including $448,215 for the nine months ending
December 31, 1997).......................................... 664,285
1999......................................................... 2,869,644
2000......................................................... 310,000
----------
$4,060,000
==========
</TABLE>

8. COMMITMENTS

Purchase Commitments--In March 1997, the Company entered into an
unconditional purchase obligation to a printing materials supplier for
purchases at market value through March 2000. Minimum future purchases under
this agreement are as follows:

<TABLE>
<S> <C>
Fiscal year ending March 31:
1997........................................................... $ 16,667
1998........................................................... 200,000
1999........................................................... 200,000
2000........................................................... 183,333
--------
$600,000
========
</TABLE>

F-11
<PAGE>

NEI WEBWORLD, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Operating Leases--During the period ended, and subsequent to, December 31,
1996, the Company has entered into long-term noncancelable operating leases
for certain equipment and for an adjacent plant facility. Minimum future
rental commitments for these leases at December 31, 1996, are as follows:

<TABLE>
<S> <C>
Fiscal year ending March 31:
1997......................................................... $ 2,133
1998......................................................... 186,402
1999......................................................... 221,976
2000......................................................... 214,620
2001......................................................... 213,444
2002......................................................... 213,444
2003......................................................... 88,935
----------
$1,140,954
==========
</TABLE>

The Company has entered into a contract to purchase the leased plant
facility for $1,700,000 by December 31, 1997. Should the Company fail to close
this transaction, the lease remains in effect and provides a five-year renewal
option at market rates. Rent expense under operating leases for the nine
months ended December 31, 1996, was $2,133.

9. INCOME TAXES

The tax effects of significant items comprising the Company's net deferred
income tax benefit are as follows:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1996
--------- ------------
<S> <C> <C>
Current:
Allowance for accounts receivable, not
currently deductible.......................... $ 1,000 $ 25,000
Vacation and bonus accruals, not currently
deductible.................................... 7,000 29,000
Other.......................................... 5,292 (6,000)
Valuation allowance............................ -- (48,000)
-------- --------
Total current assets......................... 13,292 --
Long-term:
Accelerated depreciation and amortization for
tax purposes.................................. (68,468) (79,000)
Gain on fire insurance settlement, not
currently taxable............................. -- (92,000)
Net operating loss carryforward (expiring
2011)......................................... 120,000 120,000
Alternative minimum tax credit carryforward.... 68,000 101,000
Valuation allowance............................ (77,508) (13,000)
-------- --------
Total long-term assets....................... 42,024 37,000
-------- --------
Net deferred tax asset........................... $ 55,316 $ 37,000
======== ========
</TABLE>

F-12
<PAGE>

NEI WEBWORLD, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The resulting components of income tax expense (benefit) are as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
---------------------- --------------------
1995 1996 1995 1996
---------- ---------- ----------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Current.................... $ 84,906 $ (10,786) $ (8,089) $ 35,684
Deferred................... (37,083) (95,741) (13,675) 34,824
Change in valuation
allowance................. -- 77,508 -- (16,508)
---------- ---------- -------- --------
Income tax expense
(benefit)................. $ 47,823 $ (29,019) $(21,764) $ 54,000
========== ========== ======== ========
</TABLE>

Income (loss) before income taxes and the related income tax (benefit) for
the nine months ended December 31, 1996, are as follows:

<TABLE>
<CAPTION>
INCOME TAX
AMOUNT (BENEFIT)
-------- ----------
<S> <C> <C>
Income before income tax expense and extraordinary
item.............................................. $316,178 $ 90,000
Extraordinary item................................. (108,545) (36,000)
-------- --------
$207,633 $ 54,000
======== ========
</TABLE>

Income tax expense (benefit) varies from the amount determined by applying
the statutory federal income tax rate of 34% to income before income taxes and
extraordinary item as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
---------------------- --------------------
1995 1996 1995 1996
---------- ----------- ----------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Income tax expense
(benefit) computed at
federal statutory rate... $ 50,897 $ (115,286) $(83,349) $ 90,501
Change in valuation
allowance................ -- 77,508 58,131 (16,508)
Expenses not deductible
for tax purposes......... -- 9,779 7,334 3,645
Other..................... (3,074) (1,020) (3,880) 12,362
--------- ----------- -------- --------
Income tax expense
(benefit)................ $ 47,823 $ (29,019) $(21,764) $ 90,000
========= =========== ======== ========
</TABLE>

10. PREFERRED STOCKS CONVERTED

The Company is authorized to issue 2,000,000 shares of $1 par value
preferred stock. In fiscal 1996 and prior years, the Company had Series A, B
and C preferred stocks issued and outstanding, which had annual cumulative
dividends (payable in Series C preferred stock) and mandatory redemption
features requiring annual accretion. These preferred stocks were converted to
common stock when the registration statement related to the contemplated
offering was declared effective. The financial statements are presented as if
these stocks were converted at the beginning of the periods reported.

11. COMMON STOCK

Common Stock--On March 31, 1997, the Company effected a 3.33-to-one stock
split. At the effective date of the contemplated offering, the Company
converted Series A, B and C preferred stocks to 2,008,823 shares of common
stock. All share data has been restated for these events.

Common Stock Put Warrants--In connection with the subordinated notes payable
to lender, in February 1994, the Company issued warrants for 90,000 shares of
common stock. The warrants were exercisable at any

F-13
<PAGE>

NEI WEBWORLD, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

time on or prior to the expiration date of February 28, 2004, and entitled the
holder to purchase common stock for $1 per share, subject to certain
adjustments. An estimated initial value of $50,000 was assigned to the
warrants. The warrant holder could require the Company to purchase the
warrants or common shares issued upon exercise of the warrants (warrant
shares) on or after February 28, 2000, until the expiration date, subject to
certain limitations.

In September 1996, the Company issued to the warrant holder additional
warrants for the purchase of 80,000 shares of common stock for $1 per share,
valued at $23,500, and in December 1996, redeemed the total 170,000 warrants
outstanding for $50,000.

Common Stock Options--Under a stock option plan, options for no more than
150,000 shares of common stock were authorized to be granted to certain
Company employees and consultants at prices equal to or greater than the fair
market value of the common stock as determined by the Board of Directors at
the dates of grant. In February 1994, the Company granted a principal
officer/shareholder, a director/shareholder and a preferred shareholder
options to purchase a total of 125,000 shares of common stock at an exercise
price of $1 per share. The options were exercisable subject to the Company's
attainment of certain earnings requirements. At March 31, 1996, 25,000 options
were exercisable.

In April 1996, the Company vested all options previously granted and
terminated that plan. These options for 125,000 shares of common stock were
exercised for notes receivable totaling $125,000, which are classified as a
reduction of shareholders' equity. The notes (with recourse) bear interest at
6% payable annually and mature April 2001.

On April 4, 1997, the Company adopted the 1997 Stock Option Plan (the
"Plan") which authorizes the Company to grant to employees and directors
incentive and nonqualified options to purchase up to 350,000 shares of common
stock at a price not less than the fair market value of the common stock on
the date of grant. Options under the Plan expire no more than ten years from
the later of the date of grant or the date first exercisable. Vesting
provisions are at the discretion of the Board of Directors. No options have
been granted under the Plan.

12. EMPLOYEE BENEFIT PLAN

The Company maintains a 401(k) savings plan which covers substantially all
of its regular employees. The Company's annual contribution to the savings
plan is determined at the discretion of the Board of Directors. The Company
recorded contributions of approximately $31,000, $36,000 and $23,000 for
fiscal years 1996 and 1995 and for the nine months ended December 31, 1996,
respectively.

13. TRANSACTIONS WITH RELATED PARTIES

The Company has an agreement with a preferred shareholder to provide
supervisory management services to the Company. Management fees totaled
$100,000 in fiscal 1996 and 1995, with $25,000 included in accrued management
and consulting fees at March 31, 1996. For the nine months ended December 31,
1996, management fees totaled $125,000, $50,000 of which related to the
acquisition of Webworks assets and refinancing of long-term debt. At December
31, 1996, $75,000 is included in accrued management and consulting fees.

The Company had a consulting agreement with a director and shareholder which
provides for a fixed fee each quarter and a contingent fee based on the
Company's sales growth. Consulting fees totaled $30,000 in fiscal 1996 and
1995, with $7,500 included in accrued management and consulting fees at March
31, 1996. For the nine months ended December 31, 1996, consulting fees totaled
$52,500, $30,000 of which related to the acquisition of Webworks assets. At
December 31, 1996, $7,500 is included in accrued management and consulting
fees. Effective April 1997, this agreement was terminated.

F-14
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE INFOR-
MATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN CON-
NECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES TO ANY PERSON
IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED,
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO
DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITA-
TION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HERE-
OF.

----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................................................... 3
Prospectus Summary....................................................... 4
Risk Factors............................................................. 8
Use of Proceeds.......................................................... 14
Dividend Policy.......................................................... 15
Capitalization........................................................... 15
Dilution................................................................. 16
Selected Financial Data.................................................. 17
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 18
Business................................................................. 22
Management............................................................... 28
Certain Transactions..................................................... 32
Principal Shareholders................................................... 33
Description of Capital Stock............................................. 34
Shares Eligible For Future Sale.......................................... 36
Underwriting............................................................. 37
Legal Matters............................................................ 39
Experts.................................................................. 39
Index to Financial Statements............................................ F-1
</TABLE>

----------------

UNTIL JUNE 16, 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES OFFERED HEREBY, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPEC-
TUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UN-
SOLD ALLOTMENTS OR SUBSCRIPTIONS.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

1,000,000 SHARES OF
COMMON STOCK

1,000,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS

NEI WEBWORLD, INC.

----------------

PROSPECTUS

MAY 21, 1997

----------------

FIRST LONDON SECURITIES CORPORATION

RAS SECURITIES CORP.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------